economic

Serbia and Ukraine have agreed to deepen economic cooperation, with both sides pledging to finalise a long-stalled free trade agreement by the end of the year as Serbian President Aleksandar Vucic hosted his Ukrainian counterpart, Volodymyr Zelenskyy, in Belgrade.

The commitment came on the final day of a two-day visit that concluded on Saturday, Zelenskyy’s first to Serbia since taking office in 2019. The two leaders have met several times previously, most recently in Kyiv on July 15.

Speaking at a joint news conference, Vucic said Serbia would support Ukraine’s bid to join the European Union and maintain its support for Ukraine’s territorial integrity, including territories seized by Russia since 2014.

Belgrade has, however, refused to impose sanctions on Russia, its longtime ally.

Ukraine, for its part, has not recognised Kosovo’s 2008 declaration of independence. Serbia considers Kosovo part of its territory.

“You have never heard a single bad word about our country, neither from Volodymyr Zelenskyy nor anyone else [in Ukraine], and I am extremely grateful to our Ukrainian friends for that,” Vucic said.

“Our cooperation is expanding and will become much bigger,” he told reporters, adding that Serbia would help rebuild Ukrainian cities damaged by Russia’s invasion.

Long-delayed free trade agreement

The proposed free trade agreement has been under discussion for more than two decades, with both countries now aiming to complete a deal by the end of the year.

The agreement is crucial to Serbia’s bid to join the World Trade Organization and is a prerequisite for its EU membership. Ukraine has blocked a deal since 2005 over quotas and tariffs affecting its agricultural sector.

Both leaders pointed to progress on the agreement as a sign of strengthening economic ties, alongside Serbian commitments to provide humanitarian aid and infrastructure and energy support to Ukraine this winter.

Zelenskyy said the two leaders had discussed joint infrastructure projects as well as cooperation on energy and food security before the winter, saying that “virtually not a single thermal power plant remains intact” in Ukraine because of Russian strikes.

He said Russian attacks had also damaged railway stations, hospitals, universities and civilian businesses, and thanked Serbia for preparing a new humanitarian aid package focused particularly on the medical and energy sectors.

“We are developing all formats of cooperation which can give our people … more resilience,” Zelenskyy said.

In a post on X on Saturday, Zelenskyy said he also discussed economic and logistics projects with Serbian Prime Minister Duro Macut, including the Danube Corridor and closer links between Ukraine, the Western Balkans and the EU.

Zelenskyy thanked Serbia for pledging 2 million euros ($2.3m) to support Ukraine’s energy sector.

The two countries also signed a memorandum on animal health and food safety, according to the Kyiv Post. The agreement was signed by Serbia’s Agriculture Minister Dragan Glamocic and Ukraine’s ambassador to Serbia, Oleksandr Lytvynenko.

Serbia balances EU ambitions and Russia ties

Vucic expressed doubts that either Serbia or Ukraine would secure rapid EU membership.

“I wish Ukraine every success, but this is not just a merit-based process,” he said, noting that the bloc has not admitted a new member since Croatia joined in 2013.

He also warned that he did not expect the war in Ukraine to end soon.

“I’m very afraid that we’re in for a very difficult winter – especially for Ukrainians,” Vucic said, according to the Kyiv Post.

Belgrade had condemned Russia’s full-scale invasion of Ukraine in 2022 and has supported Ukraine’s territorial integrity, but it has resisted joining Western sanctions against Moscow. Serbia also remains dependent on Russia for most of its gas.

At the same time, Serbia has sought to reduce some of its military dependence on Russia, including through an agreement to replace its ageing Soviet-era MiG-29 fighter jets with French Rafale aircraft.

The Kremlin has repeatedly accused Serbia of selling ammunition that ultimately reached Ukraine through intermediaries. Belgrade has denied supplying ammunition to Ukraine, but has said it sells ammunition to buyers around the world.

Vucic and Zelenskyy said military cooperation was not discussed during the visit.

Pictures by Jesús Vizcaya

In Boca de Aroa, a village on the coast of Yaracuy state, Yaritza and her husband Fernando await the arrival of tourists who, for the past twelve years, have stopped for breakfast at their food stand “La Bendición de Dios”. This business has been the family’s main source of income. However, after the earthquakes of June 24, almost no vehicles are going through the road to the beaches.

Fernando says that traffic decreased significantly after the earthquakes. The epicenter of the first quake was very close to them, to the south, and some houses in the area were damaged. “Before the earthquake, the flow of travelers was considerably high, but our sales are now only 25% of what they used to be. Now we live on daily earnings. What we earn each day, we use to buy what we need.”

Fernando and Yaritza are not alone. In Boca de Aroa, as in other coastal communities near Morrocoy National Park, a large part of the economy depends on the constant flow of visitors from different parts of the country. To reach its keys and beaches from Valencia, many travelers take Troncal 3, the road that runs through Boca de Aroa before reaching the most popular beaches. After the earthquakes, the road shows evident damage: several sections remained closed, and traffic had to be diverted along alternative routes, further hindering access to the region. Buses that once arrived full of travelers now carry only a handful of passengers, mostly locals who get off one by one as soon as they recognize their usual stops.

Along this route, tourists sustain an economic chain of restaurants, small businesses, and people who work in the sea. Local fishermen find their main customers in hotels, inns, and restaurants, while others depend directly on tourism, relying on the sale of food, coconut products, fish and shellfish to make a living.

Tulio, owner of La Negra, a family restaurant specializing in seafood supplied by local fishermen, says the drop in tourism has hit both the business and its employees hard. “We couldn’t open the restaurant for three weeks after the earthquake. There’s no tourism, and people aren’t coming to town anymore,” says Tulio, sitting at one of the tables. “My employees keep coming to work because I want to help them financially, but this situation is really difficult.”

There was a reason for the lack of customers. Structural damage to the bridge leading to Punta Brava Beach, within Morrocoy National Park, forced the closure of this land access for weeks. The bridge reopened to light vehicles on July 25, yet the flow of visitors remained far below normal levels. Tourists could still board boats from the Tucacas pier to reach the keys, but the weeks-long closure disrupted the economic chain that sustained Boca de Aroa and Tucacas.

The day before authorities allowed light vehicles to pass again, local beach workers protested on that same road, demanding the lifting of the measures that prevented access to the coast.

The Food and Agriculture Organization of the United Nations (FAO) warns that small-scale fishing communities are among the most vulnerable to crises and natural disasters in Latin America and the Caribbean, due to their dependence on daily income and their limited capacity to absorb prolonged disruptions to their economic activity.

The Tierra Viva Foundation, a non-governmental organization dedicated to sustainable development, environmental conservation, and the strengthening of local communities, has been working for several years with coastal communities through its Costa Viva project. This sustained presence in the territory has allowed the organization to gain firsthand knowledge of the economic and social conditions that make these populations especially vulnerable to natural disasters. Just two weeks before the emergency, on June 9, the foundation announced a fundraising campaign—which had to be suspended after the earthquakes—to provide residents of the country’s main coastal communities with work tools and vocational training to strengthen their livelihoods. The initiative responded to a situation of vulnerability that these populations already faced before the earthquake.

This is also the conclusion of Alejandro Luy, the organization’s general manager. “Venezuela is going through a complex humanitarian situation, and the earthquake aggravated it by leaving people homeless, and the contraction of tourism in the area generated unemployment,” he says. “To support their activities, we implemented training programs to help improve the services many of them offer during 2025. If tourism decreases in these areas, their livelihoods are affected.”

But the vulnerability of these communities isn’t measured solely in economic figures. It’s also present in the stories of those who saw how the earthquake disrupted a way of life built over generations.

Jesús belongs to a family that has been connected to the sea for decades. For more than 60 years, his family has lived off fishing in Boca de Aroa, a way of life that Jesús continued and that for years allowed him to sell the fish he caught. For his family, this has been the most difficult situation caused by a natural disaster. 

“In 2022, the Aroa River rose and overflowed, flooding the entire Cayumar sector and the dock area where we boarded boats to go fishing, but the flooding only lasted a couple of days. But because of the earthquakes, we haven’t sold anything we catch from the sea for several weeks.”

On June 24, Jesús had decided to return home earlier than usual. At 11 a.m., he left the sea and returned to land. Hours later, his father advised him not to go fishing again, just a couple of minutes before the earthquakes.

“I went out to buy a Coca-Cola, and on my way back home, the shaking started. My wife was at home with my parents. They managed to get out when the wall of the garage collapsed,” he recalls.

The destroyed space wasn’t just part of the family home. It was also a workplace. There, his father prepared the fishing nets, and his mother prepared the food she sold to the community members and, on weekends, to the tourists who came to the area.

“We want to rebuild our garage because my dad uses it to prepare the nets.” “My mom sells food to people in the community, but on weekends she sells to tourists,” Jesús explains.

Now he’s trying to turn the loss into an opportunity. While he waits for the debris to be removed from his mother’s porch, he started planting coconuts with the idea of ​​selling them to visitors who return to Boca de Aroa and creating a small commercial area there, but it won’t be until five years from now that he’ll see the fruits of the barely sprouted coconut trees.

His story reflects a reality that is repeated in small-scale fishing communities around the world. According to the Food and Agriculture Organization of the United Nations (FAO), this sector represents about 40% of the world’s fish catches and supports approximately 90% of fishery workers. However, those who depend on this activity often have limited capacity to absorb prolonged interruptions in their income, due to their reliance on daily work and local markets.

In Boca de Aroa, that phrase sums up the uncertainty of a community that for years lived at the pace of those who arrived seeking the sea. The absence of tourists not only left empty tables in restaurants and fewer customers for the fishermen; it also disrupted an economy built around small commercial exchanges with visitors, which sustained hundreds of families in Falcón state.

The most significant damage in the cluster of coastal towns within the country occurred in Tucacas and Boca de Aroa, unlike other tourist areas. The condition of the roads leading to these towns, along with the preventative closure of the region’s most important national park, were the main causes of the economic slowdown in these villages.

Just a few streets away from where Jesús planted the first coconuts, traces of what happened that June morning remain. Some houses are damaged, and families who lost their homes continue to wait for a solution while living in tents set up near their land.

The recovery of these fishing villages will not depend solely on removing the debris or repairing the access roads. It will also depend on those who live there being able to reconnect with an activity that for generations defined their relationship with the sea: the possibility of working, selling and supporting oneself on a coast where, after the earthquake, many are still waiting for people to return.

A Pacific island has become one of the biggest economic success stories of the year so far.

Taiwan has witnessed a dramatic boom in recent months driven by the mania for artificial intelligence (AI). Earlier this year, its stock exchange soared to become the fifth largest in the world based on market capitalisation, the value of its publicly traded shares, overtaking the United Kingdom, Canada and India.

Much of that upward momentum has been driven by AI and other technology exports highly sought after by the United States.

Last year, the US imported $201bn worth of goods from Taiwan, nearly double its rate from 2024, when it acquired $116bn in imports. In May, Taiwan eclipsed China to become the third-largest source of US imports, after Mexico and Canada.

Experts have described Taiwan’s market acceleration as a return to its status as a “tiger economy” — a term used to capture surging growth in East Asia. Much of the credit, they say, falls to its flourishing technology sector.

“Artificial intelligence helps explain the rising importance of Taiwan,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.

But critics warn that, while Taiwan’s market remains strong, factors like tumultuous international relations, as well as demographic concerns, could complicate the island’s long-term outlook.

“It seems to be a win-win for now,” said Reza Hasmath, an academic faculty adviser at The China Institute at the University of Alberta. “But Taiwan is just postponing a reality that’s not sustainable.”

An economic boom

Taiwan’s thriving export market helped boost its gross domestic product (GDP) to 8.63 percent in 2025.

That rocket-ship trajectory continued into the first quarter of this year, when the GDP saw an exhilarating 13.69 percent rise.

Government data released on Friday showed that the island is continuing that momentum, with its economy growing an impressive 12.92 percent in the second quarter of the year, which ended in June.

“The GDP growth is going like gangbusters,” said Dexter Tiff Roberts, nonresident senior fellow at the Atlantic Council’s Global China Hub.

Roberts expects the trend to be “long term”, as Taiwan produces about 90 percent of the advanced chips used to power leading AI models.

“That’s not going to go away. We know the world, and the US, needs this,” he added.

While the AI boom is a global phenomenon, the US has become a major market for such chips, with billions of dollars flowing into the industry each year.

US President Donald Trump, meanwhile, has pledged to bolster his country’s status as “the world leader in artificial intelligence”. His administration has claimed to attract more than $2.7 trillion in tech and AI investments since the start of his second term.

To secure US access to Taiwan’s cutting-edge semiconductor technology, the Trump administration signed an agreement under which Taiwan will invest $500bn in the US.

Half of that amount is expected to come in the form of direct investments by Taiwanese semiconductor and tech firms, including through the development of onshore tech manufacturing.

The rest is largely comprised of credit guarantees for additional investments from Taiwan in the US.

Under the agreement, Taiwanese firms would be allowed to import 2.5 times the capacity of their US factories, without fear of steep tariffs.

In a subsequent trade agreement, Taiwan agreed to reduce its tariffs on 99 percent of US exports.

Taiwan has also boosted its tech exports to the US through investments in nearby Mexico, with cross-border plants manufacturing inputs for data centres in Texas.

‘Unbalanced relationship’

But Hasmath, the faculty adviser at the University of Alberta, warns that there are troubling signs on the horizon for Taiwan-US relations.

Trump has long sought to eliminate trade deficits with US economic allies, and he has lashed out at countries that export more to the US than they import.

Hasmath pointed out that Taiwan is building a robust trade surplus with the US, close to $200bn and counting. That could spark a backlash.

“This is an unbalanced relationship and not conducive to Taiwan in the long term,” Hasmath warned.

Trump will not tolerate a hefty trade surplus for long, he added. Hasmath believes the US president will soon look to renegotiate his country’s deals with Taipei.

Roberts at the Atlantic Council, meanwhile, warned that Trump is “mercurial” — and with such a temperament comes “uncertainty”.

Then there’s the question of political upheaval in the US. Trump’s approval ratings are low, and he is ineligible under US law to run for a third term as president.

Demographic problems

While Taiwan’s economic boom is “very real” and “very obvious”, Roberts said there are clear vulnerabilities even on the domestic front.

Taiwan’s traditional export sectors like plastics and textiles are underperforming. Plus, Roberts pointed out that only a small fraction of the Taiwanese population is involved in the AI sector.

“A majority of the younger population is not in hi tech, so that’s a real problem,” he said.

While the booming stock market has sparked a “wealth effect” — those with rising portfolios feel richer and are more inclined to spend — that helps the wider population only to an extent.

With most of Taiwan’s employment concentrated outside of the AI sector, economists have warned that the island could develop what’s called a K-shaped economy, where the wealthy see growth, while the poorer segments of society stagnate or decline.

The chip industry employs up to 350,000 people at most, experts say.

Meanwhile, TSMC, Taiwan’s biggest chip company, makes up to 40 percent of the stock market and provides four percent of the island’s GDP growth. That lopsided proportion is “unsustainable”, according to Hasmath.

Plus, Taiwan has a rapidly ageing population, with roughly a fifth of its population over the age of 65.

The island also has other vulnerabilities. For example, it relies heavily on foreign imports of energy products, particularly oil, and has struggled with water scarcity.

Then, there’s the superpower next door: China. The government in Beijing considers Taiwan, a self-governing island, as its own territory, and it has taken aggressive measures to limit the island’s ability to establish diplomatic relations of its own.

That conflict has added fuel to the debate around Taiwan’s growth, with a spokesperson for the Chinese government reportedly saying the island’s growing proximity to the US tech sector will “drain Taiwan’s economic interests” and “hollow out” the country’s major industry.

Hasmath said that, if the AI boom backfires on Taiwan, all of that ultimately adds up to a “recipe for electoral change, a shift in government” in Taipei.

WASHINGTON — With three months remaining until election day, there is now little the Trump administration can do to bring relief to Americans battered by years of stagnant wages and steep inflation before they hit the polls, experts say — complicating midterm campaigning for Republicans and sharpening the opportunity for Democrats to win back some control in Washington.

That’s in part because the Trump administration has very few levers to turn the tide in such a short period, and has shown little interest in using those it does have, experts said. Rather, President Trump has persisted in waging war in Iran and pushed forward with new tariffs on trade partners despite both contributing to soaring costs for food, gas and other basic necessities.

Other options, such as issuing rebate checks for consumers or releasing strategic oil reserves, would be costly in the long run, experts said.

“There isn’t much available on a 14-week clock that doesn’t cost more later than it delivers now,” said Patrick Harker, professor at the University of Pennsylvania Wharton School and former president of the Federal Reserve Bank of Philadelphia.

The Federal Reserve on Wednesday also declined to use its primary tool for reducing inflation — increasing interest rates — by instead holding rates steady. Trump had not supported a rate increase, instead pressuring the central bank to lower rates, which can lower borrowing costs but increase inflation.

Some factors driving up costs are virtually impossible to resolve in the near term, such as damage to oil refining capabilities in the Middle East as a result of the war in Iran. Others are already baked into pricing to come as a result of tariffs and fuel costs, including for groceries, experts said.

Incumbent parties often suffer midterm losses when voters are broadly pessimistic about the economy, as they are now despite remarkable resilience in the U.S. labor market and strong stock returns.

Consumer prices declined in June for the first time in six years, largely thanks to a decline in gas prices as the Iran war appeared headed toward a resolution — which is no longer the case.

New data Thursday showed the U.S. economy growing at a sluggish 1.5% pace from April through June. It also showed consumer spending and inflation slowing down. But slowing inflation has not meant lower costs.

As the Iran war entered its sixth month this week, average gas prices nationally climbed back above $4 a gallon. On Wednesday, the price of Brent crude oil rose to $90 a barrel as the U.S. and Iran carried out new strikes.

The White House did not respond to a request for comment. However, Trump asserted Wednesday that the economy is strong — citing in part new U.S. automobile plants as evidence — while slamming the Federal Reserve’s decision to leave interest rates unchanged.

“They want to keep rates up, but we will fight through this,” Trump told reporters at an Oval Office event. “We have things that are going on in our country in the likes of which no one has ever seen.”

As Democrats have seized on the economy as the midterms’ defining issue, Trump has promised improvements but also called affordability concerns a “hoax.” Last week, he rejected the notion that he should rethink his unpopular Iran strategy because of the looming midterms.

“No, the election — I can’t think about that having to do with this,” he said before renewing attacks last week. “I think people are very impressed.”

Jonathan Nagler, a New York University professor who studies how the economy shapes politics, said it is impossible to predict how voters will feel about the economy three months from now, because there are so many variables.

But data make clear that “the better the economy is, the better the incumbent does,” and voters will blame Trump and his party for their economic woes if they persist, Nagler said — particularly with gas prices, which are “a non-trivial expense” that is “super directly tied to Trump.”

“Democrats can draw a very straight line from a decision by Trump to go to war with Iran, and gas prices rising. That is just very, very easy to explain to people in a pretty convincing way,” Nagler said. “Democrats can try to say, ‘Hey, there should be some accountability here.’”

Diane Swonk, chief economist at KPMG, said inflation has compounded for years “to make the level of prices too high for too many,” and is clearly the biggest economic issue facing many Americans.

“And that’s not likely to change in the next few months, where you still not only have some of the spillover effects of the war in Iran to play out — most notably in terms of the fall harvest and food prices, which will go well into 2027 — but also just the on-again, off-again truces and the damages to refining capacities,” she said.

All of that is adding to “simmering” service sector inflation and Trump’s latest tariffs, which mean “more paperwork, more costs, and another bump in prices in the pipeline,” Swonk said.

Harker said the administration has no good options for bringing down prices by November. Reducing tariffs takes time to filter down to shelf prices, so that can’t offer a quick fix even if Trump were to decide to cut them, he said.

The biggest variable between now and November is energy, Harker said, and no economic tool allows the administration to control what happens in the Persian Gulf. Even if Trump’s war with Iran were to end, economists say it would take a significant amount of time for gas prices to come down.

The Fed could decide to raise rates in September, but Harker said that would take time to filter through the economy and would do “nothing” ahead of November.

On the campaign trail, Trump promised to immediately “reverse the disastrous effects of [President] Biden’s inflation and rebuild the greatest economy in the history of the world,” one where “incomes will skyrocket, inflation will vanish completely, jobs will come roaring back, and the middle class will prosper like never, ever before.”

A recent CNN poll found that 65% of Americans believe Trump’s policies have worsened economic conditions in the country, while less than a quarter — 22% — said they had improved conditions, and that 67% believe Trump’s choices in Iran hurt the U.S.

The poll found Trump had a 34% approval rating, matching a career low from the end of his first term, and that his support fell even lower on key issues: to 28% on Iran, 25% on inflation and 21% on gas prices.

A recent Pew Research Center survey found most Americans aren’t feeling great about the economy — with 24% rating economic conditions as excellent or good, 41% rating them as “only fair,” and 35% rating them as poor. It also found that voters want candidates running for Congress in November to talk about economic issues.

Democrats see the poll numbers as an opportunity to win over swing voters, which becomes more urgent as the campaign enters its fall stretch.

House Democratic Leader Hakeem Jeffries (D-N.Y.) last week placed blame for rising costs squarely on Trump‘s tariffs, his “reckless war of choice” in Iran, and cuts to healthcare made in last year’s federal spending package.

Vidhya Jeyadev, a spokesperson for Majority Democrats, which is focused on growing the party, said Democrats now have an opportunity to bring in Republican voters disillusioned with the president’s handling of the economy.

“We need to tie what people are feeling day to day — rising rent, groceries, utility costs — directly to the choices that Trump and Republicans have made,” Jeyadev said.

Many Republican leaders have acknowledged economic challenges while defending Trump’s policy decisions.

They have broadly backed the war in Iran as a necessary step to halt Iran’s nuclear ambitions. House Speaker Mike Johnson (R-La.) recently defended Trump’s tariffs, too, acknowledging some sectors have experienced “challenges” as a result, but saying “all that’s settling out as we go into this election cycle.”

Swonk said some economic indicators do show a surprisingly strong economy that benefits the rich.

However, “there’s a reason people are upset, and that’s because inflation, much like stock returns, has compounded — but not everybody has stock returns. Everybody feels inflation. And that drives a larger wedge between the haves and the have-nots,” she said.

“What anyone really cares about is the prices that went up didn’t come back down, and their wages didn’t keep up with it,” Swonk said. “It doesn’t feel like you can do as many things as you once did. And that’s hard.”

China’s top leaders pledged on Thursday to support the country’s slowing economy by accelerating spending on already-approved infrastructure projects instead of rolling out large-scale stimulus measures. The decision came after recent economic data showed second-quarter growth slowed to 4.3%, the weakest pace in more than three years and below the government’s annual target range of 4.5% to 5.0%.

The commitment followed a meeting of the Communist Party’s Politburo, where policymakers acknowledged mounting economic challenges but signaled confidence that existing fiscal resources would be sufficient to stabilize growth through the remainder of the year.

Infrastructure Spending Takes Center Stage

Rather than introducing fresh stimulus packages, Beijing plans to speed up implementation of projects that have already been budgeted. Analysts said the government still has significant fiscal room because infrastructure spending and bond issuance progressed more slowly than planned during the first half of the year.

Economists expect much of the spending to focus on China’s “six networks” initiative, covering investments in water systems, logistics infrastructure, underground pipelines, electricity grids, telecommunications and computing power centers. State media has previously indicated that roughly $1 trillion has been allocated for these projects.

Analysts viewed the Politburo’s statement as confirmation that Beijing intends to support growth without significantly expanding its fiscal deficit.

Concerns Over Overcapacity Remain

Chinese leaders continue to avoid aggressive stimulus partly because they remain focused on tackling industrial overcapacity and encouraging local governments to maintain fiscal discipline.

The Politburo reiterated its commitment to addressing what it described as “involution competition”—a term referring to intense price wars among manufacturers competing for market share at the expense of profitability. While many economists argue that excess industrial capacity is driving these price wars, Beijing continues to reject claims that overcapacity is a structural problem.

Weak Consumer Demand Continues to Weigh on Growth

Although manufacturing exports and advances in artificial intelligence have supported parts of the economy, domestic consumption remains weak.

China’s prolonged property downturn, sluggish wage growth and a challenging labor market have reduced household confidence. Millions of workers have shifted into lower-paying gig economy jobs with limited social protections, encouraging higher savings rather than consumer spending.

This imbalance has increased China’s reliance on exports to sustain growth, raising concerns among trading partners that Chinese manufacturers are flooding global markets while domestic demand remains subdued.

Employment Support Remains a Priority

The Politburo pledged to strengthen domestic demand by expanding employment support, particularly for flexible workers and those in newer forms of employment. However, officials did not announce specific policies aimed at boosting household incomes.

Economists noted that while Beijing continues to emphasize consumption, its strategy remains focused on improving the supply of goods and services rather than directly increasing consumer purchasing power through large-scale income support or cash stimulus.

Outlook

The latest policy signals suggest Beijing is seeking to balance economic stability with long-term structural reforms. Rather than relying on broad stimulus, China’s leadership is betting that faster implementation of existing infrastructure investments and targeted employment measures will be enough to keep the economy on track while avoiding a surge in debt and further industrial overcapacity.

With information from Reuters.

The announcement by the head of Yemen’s Presidential Leadership Council, Rashad al-Alimi, to resume oil exports starting July 20 following a halt that began in late 2022 has revived hope that the Yemeni government’s most important source of foreign currency will be restored. The government, struggling economically and facing continued Houthi rebel control over Yemen’s northwest, needs the money – and has pledged to direct the revenues towards paying salaries, improving services, and supporting economic stability.

However, the flow of oil from Yemen’s fields to global markets does not depend solely on a decision made by politicians; it requires creating a security environment, after years of war, that allows for the protection of facilities, pipelines and ports, in addition to restoring the confidence of shipping and insurance companies, as well as international buyers.

With Yemen’s war threatening to escalate after a four-year period of calm, the stability the country needs to resume oil exports may be elusive.

The export test

Yemen has proven oil reserves estimated at about three billion barrels, primarily concentrated in the Masila, Marib and Shabwa basins. While the United States Energy Information Administration (EIA) indicates that the country still holds sufficient resources for production and export, the security environment hinders their extraction and transport to global markets.

Yemen’s oil production reached a historical peak of about 439,000 barrels per day (bpd) at the beginning of the millennium, but it has gradually declined due to the depletion of some old fields. This decline accelerated with the outbreak of the war in 2014 and the targeting of oil infrastructure, settling at a level of 19,000bpd in 2024, according to the International Monetary Fund (IMF).

A report published by S&P Global estimated actual production, following the halt in exports, at about 7,000bpd to 10,000bpd in 2023 and 2024, almost all of which was for domestic use.

Yemeni Minister of Oil and Minerals Mohammed Bamqaa said that export revenues would be deposited in the Central Bank as part of a government directive to bolster the state’s financial resources, pointing out that there are oil stockpiles exceeding 1.7 million barrels ready for export.

Bamqaa added that total production will initially reach about 60,000bpd. He explained that the ministry has directed oil companies to prepare timelines to increase production and develop the fields, in a way that raises production capacity by up to 25 percent during the first month after exports resume.

Professor of financial economics at Hadramout University, Mohammed al-Kasadi, told Al Jazeera that while he expected oil production to meet the 60,000bpd figure mentioned by Bamqaa, the figure does not reflect the actual volume of exports, as the local market consumes about 20,000bpd to operate refineries and power plants, which makes the quantities available for export likely to hover at about 40,000bpd.

Hassan Mohammed Moghalis, an expert in Yemeni affairs, told Al Jazeera that most of the fields located in government-controlled areas remain capable of production. At the forefront of these are the Masila fields in Hadramout and the al-Uqla fields in Shabwa, which represent the fundamental base for any anticipated resumption. Moghalis explained that crude oil can be transported via pipelines to Arabian Sea ports.

However, Moghalis pointed out that resuming exports does not simply mean opening the valves, as some fields require maintenance and restoration after a long period of suspension. Additionally, pipelines and pumping stations require technical reviews to ensure their readiness before resuming regular operations.

Market confidence

Despite the importance of restarting production at the oilfields, experts believe bigger obstacles await after the oil reaches Yemen’s ports. Houthi attacks targeting export ports in Hadramout and Shabwa in late 2022 made shipping and insurance companies more wary of handling Yemeni crude, pushing up insurance costs and weakening buyers’ willingness to enter into contracts.

The Houthis have conditioned the resumption of exports on them receiving a share of the revenues to cover public sector salaries.

Al-Kasadi, of Hadramout University, says that the government’s success in pumping oil to the port does not automatically guarantee a successful export process. Maritime transport and insurance companies primarily assess the level of security risks and the likelihood of ports or tankers facing renewed attacks – currently a particular concern in light of Houthi attacks on shipments tied to Saudi Arabia, which supports the Yemeni government.

Al-Kasadi added that the oil market relies heavily on trust and stability. Therefore, any export operation requires buyers to be convinced that shipments will depart safely and that export activities will not suddenly halt again.

Moghalis, the expert, believes that providing military protection for ports and pipelines is the first step, but not the only condition. It is also imperative to restore the confidence of insurance companies and international buyers, as oil does not reach markets solely through production, but rather via an interconnected system of transport, financing and insurance.

He added that any new attack on the ports, even if it does not cause significant material damage, could be enough to send the sector back to square one, given shipping companies’ sensitivity to risks in conflict zones.

But, as al-Kasadi pointed out, a resumption in exports is vital. He argued that the halt in exports was not merely an oil sector crisis, but rather developed into a comprehensive financial crisis. The government lost its most crucial source of foreign currency, which negatively impacted the Yemeni rial’s exchange rate and the state’s ability to finance basic services.

Economic pressure

Despite the importance of resuming exports, Yemeni affairs expert Abdul Karim al-Ansi warned against overstating its immediate impact on the Yemeni economy.

He told Al Jazeera that the resumption of exports will undoubtedly provide a vital source of foreign currency and afford the Central Bank greater leeway to support monetary stability. However, it will not be enough on its own to end the economic crisis, as the Yemeni economy faces broader challenges related to the division between government- and Houthi-controlled areas, weak non-oil revenues and declining economic activity.

Al-Ansi added that the extent to which Yemenis benefit from oil revenues will ultimately depend on how these funds are managed and the government’s ability to channel them into salaries and basic services, rather than solely on the volume of exports.

And while successful initial shipments could send a positive signal to markets and investors, al-Ansi stressed that the real test would be whether exports can be sustained. Yemen’s economy needs a steady flow of foreign currency, rather than sporadic shipments that stop whenever security conditions deteriorate.

The suspension of oil exports has not only deprived the government of its most important source of revenue, but also intensified pressure on the foreign exchange market. As dollar inflows from oil sales have dried up, demand for foreign currency has remained high to finance imports of essential goods, particularly food, fuel and medicine. The resulting shortage has weakened the Yemeni rial and contributed to rising inflation.

These pressures have been compounded by the monetary division between the Central Bank in Aden and the Houthis in Sanaa, which has created two separate financial systems and exchange rates. The split complicates monetary policy and limits the authorities’ ability to use oil revenues in a coordinated way to stabilise the economy.

Al-Kasadi said that Saudi financial support for the government had recently helped contain currency volatility in government-held areas. However, he stressed that such support was no substitute for a steady and sustainable flow of oil revenues – which needs a period of stability, something that may be difficult if the conflict escalates in Yemen, as it is currently threatening to do.

Damascus, Syria – For many Syrians, the decades of rule by the al-Assad family – Hafez al-Assad from 1971 to 2000, then his son Bashar from 2000 to 2024 – were filled with oppression from the state and eventually more than a decade of civil war.

But one of the most important legacies has been an economic one – the result of the sanctions imposed by a number of countries, led by the United States, that effectively froze Syria out of the international economic system.

Despite the fall of Bashar al-Assad after rebel groups defeated him in December 2024, many of the sanctions, including a “state sponsor of terrorism” designation, have remained.

The designation has impeded Syria’s rejoining of the international community, while sanctions have impacted Syrians. Sending money back home from abroad often requires routing transfers through neighbouring countries, such as Lebanon or Turkiye, while access to some websites and online services, including Netflix and Slack, may require a virtual private network.

But there has been a positive reaction to the announcement on Wednesday by US President Donald Trump that his administration will remove Syria from the state sponsor of terrorism list.

The lifting of previous US sanctions, such as those related to the Caesar Act, has not transformed the Syrian economy, but it is hoped that those linked to the “state sponsor of terrorism” listing will allow the country to finally flourish.

“God willing, it will improve things,” said Ihab, a pastry shop owner in central Damascus.

Reintegration

US sanctions are thought to have been a huge barrier to foreign investors since the rule of Bashar al-Assad.

The World Bank said that since 2011, sanctions have led to a major collapse in exports and an increase in the trade deficit.

After the fall of the al-Assad government, interim President Ahmed al-Sharaa’s administration has identified the removal of all international and US sanctions as the key to reinvigorating the economy.

Al-Sharaa, the former head of the al-Qaeda-aligned Nusra Front, was himself sanctioned by the United Nations and was wanted as a “terrorist” by the US. But he has made efforts to shed those associations and build trust internationally, including by pledging to play a role in the fight against ISIL (ISIS).

His efforts have largely been successful, with the European Union and the US removing many of the sanctions on Syria and on al-Sharaa himself. The sanctions linked to the US’s “state sponsor of terrorism” list are among the few to remain.

The first “state sponsor of terrorism” designation on Syria was during Hafez al-Assad’s rule in 1979, due to the government’s support for Palestinian armed groups.

Additional sanctions were imposed on the state and individuals associated with the al-Assad regime, due to their systematic use of torture and chemical weapons.

Some rebel groups were also sanctioned due to their links to al-Qaeda and other banned organisations.

Al-Sharaa ended al-Nusra Front’s affiliation with al-Qaeda in 2016 and effectively eschewed the group’s ideology.

He also moved to establish a broader, national armed coalition dedicated to fighting the Assad government, later becoming Hayat Tahrir al-Sham.

In May 2025, around the time Trump met al-Sharaa in Riyadh, the US president promised to remove many of the sanctions on the Syrian government. But the expected removal from the “state sponsor of terrorism” list will be particularly welcome as it gets rid of one of the main barriers for international banks and companies.

“This is extremely significant because it’s the last major impediment to international economic and political engagement with Syria and with the al-Sharaa administration, and in terms of reintegrating Syria back into the international order and indeed the international economic and political system,” Rob Geist Pinfold, a lecturer on security studies at King’s College London, told Al Jazeera.

Struggling economy

However, he is careful to add that the removal of the designation does not mean a flood of investment will instantly start pouring into Syria.

“This is a big hurdle that’s been overcome, but it doesn’t mean that there’s no more hurdles to investment or engagement with Syria.”

He added that international actors may be concerned about the government’s control and ability to confront remnants from the al-Assad regime, a potential ISIL (ISIS) comeback, bureaucratic impediments and corruption.

Some Syrians were also sceptical that the designation change would lead to instant results.

“This needs a long breath,” said a minimarket owner in Damascus, who refused to give his name. “You can’t sleep and wake up and expect change.”

He referred to ongoing economic problems and rising costs, as well as a recent fuel shortage.

“There’s no economy, and there’s no investment.”

Other Syrians were more hopeful that the economy, and other aspects of daily life, would improve. Still, there is a recognition that a little more patience is needed.

For some, that patience has worn out, such as the minimarket owner. Others, however, are biding their time.

At a juice stall in central Damascus, Zaher counted money received from a customer.

“I’m on the street with my cart and nobody is bothering me,” he said. “Electricity is getting better, but nothing gets better after just one day.”

“It took God Almighty six days to create Earth,” the 50-year-old said. “These things take time.”

The second half of the year rests on a delicate chain of dominoes, according to a new briefing from Oxford Economics, and whether the US-Iran peace agreement holds is the factor that determines how the rest fall.

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“Its durability will determine whether the global economy gets an energy-driven disinflation tailwind or absorbs a second oil shock,” stated chief global economist Ryan Sweet in the report, calling the deal “the key domino that will determine whether other risks are amplified or dampened”.

The consultancy expects the global economy to accelerate, forecasting annualised growth of 3.1% in the second half against an estimated 1.6% in the first, powered chiefly by cheaper oil feeding through to household incomes, although Sweet puts the odds of reaching a durable deal at “a coin flip”.

If the truce holds, Oxford Economics sees Brent crude averaging in the low $70s per barrel, easing inflation and financial conditions across emerging markets and tech valuations.

If it breaks, the consequences would not stay contained to the oil market.

Early on Wednesday, the US military attacked Iran after it said Tehran struck three ships in the Strait of Hormuz. Iran retaliated with strikes targeting Bahrain and Kuwait. The regional crossfire raised the risk that the interim agreement to halt fighting in the war could break down. However, the exchange of fire followed a pattern of similar attacks during the deal’s shaky ceasefire, and neither country immediately signalled it would step away from the negotiating table.

Oil prices reacted to the attacks by increasing more than 3% by Wednesday morning, with international benchmark Brent trading above $76 a barrel.

“A peace deal breakdown won’t just raise oil prices, it would also increase pressure on AI supply chains in Asia, force central banks to be hawkish, tighten financial conditions, and could shift the outcome of the US midterms and Israeli elections […] the cascade runs fast,” Sweet stated.

A coinflip with a $20 spread

Not everyone shares Oxford Economics’ outlook for oil prices.

Morgan Stanley’s mid-year outlook, published in May, forecast crude climbing back to roughly $90 a barrel by the end of the year, a gap of some $20 compared with Oxford Economics’ forecast that amounts to two different bets on the same peace process.

The World Bank is also more cautious, forecasting Brent crude to average about $94 a barrel this year while warning that global GDP growth will slow to 2.5% in 2026.

Reflecting on how the recent exchange of attacks is testing the fragile truce, Sweet said, “Traffic through the Strait of Hormuz is a good bellwether. The deal committed to fully restoring traffic through the chokepoint within 30 days, making mid-July the first hard deadline,” he explained.

“A sustained return to 75% or more of pre-war traffic by mid-July would increase the odds that the agreement is holding and vice versa,” Sweet concluded.

The other indicator, he says, is whether Iran formally invokes the accord’s Lebanon clause over Israeli strikes, and whether its response comes in military or rhetorical form.

Tariffs, trade and AI

Trade is another risk that could reshape the outlook.

US Section 122 tariffs are due to expire on 24 July, but Washington has already lined up replacement levies under Section 301. Oxford Economics expects the changes to push effective tariff rates higher from late July as the US seeks to maintain monthly tariff revenues of between $25 billion (€21.8bn) and $30 billion (€26.2bn).

Europe is also taking a tougher stance. The European Commission has more than 50 trade-defence investigations open against China, up from 17 a year ago, and plans to unveil a broader economic security strategy by September.

These trade tensions also feed into the AI boom that has powered financial markets this year.

Oxford Economics notes the US AI industry depends heavily on semiconductors and other hardware shipped from Northeast and Southeast Asia, the regions with the most to lose from any further disruption to commodities passing through the Strait of Hormuz.

Meanwhile, the Bank for International Settlements (BIS), the umbrella body for central banks, warned that the AI boom increasingly rests on opaque “circular financing” between chipmakers, cloud giants and artificial intelligence labs, as well as lightly regulated private credit, where lending to the sector has quadrupled in five years.

The BIS’s Asia-Pacific chief, Zhang Tao, cautioned that the sector’s reliance on non-bank funding means an AI downturn could trigger a sharper and faster correction than a traditional banking crisis.

Sweet modelled what such a reversal could look like.

“We have created a so-called tech bust scenario where US technology stocks fall by 25% over the course of a year,” he told Euronews.

According to Sweet, such a shock would cause the US economy to “grind to a halt”, spilling over to technology exporters and investor sentiment worldwide, leaving global growth 1.1 percentage points below Oxford Economics’ baseline next year.

Central banks, ballots and the calendar

The final dominoes are policy and politics.

Oxford Economics expects the major central banks to prove more dovish than financial markets currently anticipate, though they could pivot quickly if traffic through the Strait of Hormuz falters or AI-input prices signal supply stress.

The nearest test is the Federal Reserve’s rate decision under chair Kevin Warsh later this month, coming on the heels of June’s soft jobs report.

Beyond that lie November’s US midterms and Israel’s general election, due by late October, both of which could influence the Middle East peace process. In September, German state elections could also test the coalition behind Germany’s fiscal policy, a key driver of the eurozone economy.

Oxford Economics also flags genuine upside, from stronger AI-driven productivity to an EU economy that weathered the second quarter surprisingly well.

Whether the resilience in Europe is real will show up first in Germany and in credit data, Sweet argues.

“If corporates were absorbing margin compression from the jump in energy prices without cutting investment and drawing down credit lines, that would strengthen the case that underlying momentum in the economy is better than we expected,” he told Euronews, adding that a contraction in eurozone bank lending would push the other way.

It is important to highlight that the typical Oxford Economics forecast miss is nearly a full percentage point, and the range around this assessment in particular is wider than usual.

The California dream, according to the latest Times’ poll: National Guardsmen patrol the border with Mexico, bayonets at the ready. Every resident, citizen and non-citizen alike, carries a tamper-proof identi ty card (You can’t leave home without it). Countless times a day, the card is shown to bureaucrat or police officer to prove citizenship. The 14th Amendment, guaranteeing citizenship to the U.S.-born, is abrogated. Truant officers, lists in hand, enter classrooms and pull undocumented children from behind their desks, trundling them into vans for shipment to relocation centers. At hospitals nearby, emergency-room doctorsturn away the sick or injured who do not possess the identity card.

Every now and then, the people of California surrender themselves to a recurrent paranoid delusion that is virtually a badge of Californian identity. Now is such a time. And the combination of a paranoid-delusional populace and demagogic politicians has engendered among Californians a mean-spiritedness, a detachment from reality–and worse, a fear of freedom itself.

It happened in Los Angeles on Oct. 24, 1871, when a mob, which included some of the city’s best citizens, tortured and hanged 17 Chinese men from downtown lampposts, among them a teen-age boy, then looted the Chinese quarter.

It happened in the 1930s, in the midst of the mother of all Depressions, to Dust Bowl migrants. In February, 1936, the city of Los Angeles declared both the federal and state constitutions null and void, dispatched 126 police officers to seal off all California’s land borders from entry by migrants–all American citizens–who could not prove their net worth.

It happened most sweepingly in 1942, when American citizens of Japanese descent were shipped off to what were euphemistically called relocation centers.

It happened in June, 1943, when thousands of young servicemen wandered the streets of Los Angeles, beating up young Mexican males, stripping them of their zoot suits, blaming them, implicitly and explicitly, for the fact that they, the Anglos, had to go off to war while the Mexican youths were able to stay home and jitterbug.

As Yogi Berra would say, “It’s deja vu all over again.” Just as Californians once believed that the Chinese, the Japanese, the Dust Bowlers, or Mexican youths in zoot suits were the cause of their ills, they now believe, with the full force of mass psychosis, that illegal immigrants–read: illegal Mexicans–constitute the gravest threat to our way of life, in a close third to the economy and crime, to which illegal immigration is intimately linked.

Think of it! Mexican illegals responsible for bloated bureaucracy. Mexican illegals responsible for special-interest-dominated politicians. Mexican illegals responsible for a soaring divorce rate, the breakdown of the family, AIDS, venereal disease, declining standards in culture and education, anti-female violence in rap music, drugs, child abuse, spousal batterings, the loss of religion and personal morality, deferred maintenance of the infrastructure, teen-aged pregnancies, the Inquisition of political correctness, slovenliness in personal dress–or whatever other symptom one might choose to signify the decline of California as a culture.

To say all this is not to deny that California faces a terrible array of problems, including illegal immigrants. As Delmore Schwartz once pointed out, even paranoids have enemies. Illegal immigrants are a drain on the public sector. The underground economy–with its exploitative wages, lack of benefits, forged and perjured documents–corrupts employer and employee alike.

Furthermore, in an economy partly dependent upon illegal immigration, citizenship is devalued. What previous generations struggled for across a lifetime–the chance to live and work in America–is stolen by means of false papers. The ghetto existence of illegal immigrants reinforces an unfortunate tendency in the legal immigrant community not to learn English, not to assimilate, on some level, the language, legal and institutional structures, heritage and historical identities of the United States of America.

As bad as these problems are, however, they are not the whole picture. The state’s current malaise cannot be blamed on the young busboy, far from home, washing dishes late into the night in an upscale restaurant on the Westside. Indeed, in the vast majority of instances, Mexican illegals are doing the work that others–even those on welfare–will not do, yet needs to be done.

How did we lose faith in the premise of America and California, which is freedom and an open society, personal liberty, courage, fairness and, whenever possible, generosity to others who also wish something better for themselves? Why are we talking about bayonets on the border when, every day, there are tens of thousands of legal crossings between Mexico and California crucial to the survival of our economy? Why are we scapegoating obliquely, perhaps, yet with loathsome effectiveness, the fact of Mexican immigration to America, an immigration that was absolutely necessary for the creation of modern California?

Mexican labor built the interurban electrics that made possible modern Los Angeles and its hinterlands. Mexican labor played the major role in the creation of the agricultural economy that still remains the leading component of California’s domestic product.

Californians had it easy in that long arc of prosperity extending from World War II through the ‘80s? When it was taken away–when California began to suffer like the Rust Belt or rural New England or Appalachia–they turned around and blamed the weakest, especially an underclass approaching non-personhood.

Paranoia is intrinsically self-destructive. Paranoids not only blame others; they do damage to themselves. And so it is not surprising that the current paranoid-delusional mind-set, not content with soldiers on the border and identity cards, with kids yanked from classrooms and the sick denied treatment, now seeks to sink the North American Free Trade Agreement. True, the treaty requires some amending, but to kill the entire idea of economic cooperation with Mexico on the ground that Mexico will hijack our economy is to betray in an instant how far our self-esteem has sunk, how far we have devolved into paranoia. We want it both ways: to see the Mexicans as, on the one hand, illegals enervating our social system; and, on the other, to see them back on their own turf, capable of stealing our industrial base.

What a horrible hypocrisy for California to simultaneously exploit and berate those who come only for a better life.

Originally published in Spanish on Asdrúbal’s personal Substack

There are weeks that change a government. And there are weeks that change a country. This is one of them.

Until just a few days ago, the economic debate regarding Venezuela revolved around how much we would grow this year. Around whether the figure would be 4% or 6%, and at what point that growth would materialize in people’s daily lives: exchange rate stabilization, the reestablishment of relations with multilateral organizations, and the possibility of slowly beginning a recovery process.

On the morning of June 24th, a Financial Times scoop centered the discussion on the actual size of our foreign debt. That was the horizon. Today, the horizon no longer looks like that. The earthquakes that struck this week not only leave a human tragedy of dimensions still difficult to quantify; they also profoundly alter the country’s economic outlook. International evidence shows that a major earthquake can generate losses equivalent to between 3% and 10% of GDP, depending not only on physical damage but on the State’s capacity to respond.

Anyone who thinks the problem is limited to the cost of rebuilding highways, hospitals, or housing is seeing only a part of the picture. Earthquakes destroy infrastructure, but they also destroy productivity, employment, tax revenues, logistical chains, and confidence. Thousands of businesses interrupt operations, families postpone consumption and investment decisions, and economic activity loses momentum for months or even years. The expectations and decisions of economic agents are disrupted by a widespread sense of loss and uncertainty.

The economic literature is quite consistent on this point. Studies by the World Bank, the IMF, and numerous academic papers conclude that the impact of a natural disaster depends far less on the intensity of the phenomenon itself than on the institutional strength of the affected nation. Economies with solid States tend to absorb the initial shock and recover relatively quickly. Conversely, in fragile States, a natural disaster often mutates into a prolonged economic crisis because institutional weakness amplifies the damage and delays reconstruction.

The economic agenda will no longer be dominated exclusively by growth, but by reconstruction. We need to prevent the disaster from destroying a large part of Venezuela’s remaining physical and human capital.

That is precisely Venezuela’s primary challenge. Over the years, the country lost fiscal, technical, and operational capacity. This is not a political assessment, but an observable fact. The State’s capacity to design public policy has been significantly reduced. The prolonged economic crisis and hyperinflation led us to a state of “save yourself if you can.”

The difficulties in maintaining basic infrastructure, public utilities, or the hospital network were already evident before the earthquake. Rebuilding cities like La Guaira demands far more than financial resources: it requires planning, engineering, contracting capacity, technical supervision, and a public administration capable of coordinating thousands of projects simultaneously. Today, the Venezuelan State lacks a good portion of those capabilities.

Our recent history shows how society has demonstrated resilience where the State has lost capacity. The private sector, non-governmental organizations, churches, universities, and multiple civil society initiatives have, through years of crisis, developed a remarkable ability to organize, mobilize resources, and respond swiftly to emergencies. We saw it during the pandemic, during the landslides in Las Tejerías, and in so many other humanitarian crises. And we are seeing it now. This accumulated experience will be one of the most critical assets in confronting this tragedy, though on its own, it remains insufficient to undertake a reconstruction of this magnitude.

It would be a mistake to turn international aid into a battleground for confrontation. Venezuela doesn’t need speeches on sovereignty, but engineers, heavy machinery, hospitals, drinking water, electricity, and the capacity to rebuild.

That is why I maintain that this earthquake completely changes the economic conversation. Just a few weeks ago, we were discussing how to accelerate growth, attract investment, or deepen reforms. We argued that institutional reform was necessary for Venezuela to achieve sustained and inclusive growth. Today, the priority has shifted to preventing the disaster from destroying a large part of the country’s remaining physical and human capital. The economic agenda will no longer be dominated exclusively by growth, but by reconstruction.

An inevitable conclusion emerges from this: Venezuela cannot face this challenge alone. This is not merely a matter of securing financing. It will be indispensable to mobilize technical assistance, specialized teams, field hospitals, temporary infrastructure, fast-access credit, and international coordination mechanisms. International cooperation will cease to be a mere complement and will become a necessary condition for recovery.

There’s some good news, however: for the first time in many years, the conditions exist for such cooperation to be possible. The reestablishment of relations with international financial institutions opens a window that until a few months ago seemed firmly shut. It would be a mistake to turn this aid into a new battleground for political confrontation. Countries do not need speeches on sovereignty after an earthquake. They need engineers, heavy machinery, hospitals, drinking water, electricity, and the capacity to rebuild.

The country needs to design a roadmap to achieve broad political agreements, leading to a democratically elected government able to drive the necessary reforms.

Economic history demonstrates that major disasters can become turning points. Some countries seized these tragedies to modernize their infrastructure, strengthen their institutions, and build more resilient economies. Others remained trapped for decades in a cycle of destruction and precariousness. The difference was never solely the magnitude of the earthquake, but the quality of the collective response.

Beyond the immediate emergency, this tragedy also leaves a political lesson that is impossible to ignore. The reconstruction of Venezuela demands more than financial resources or international assistance. It requires leadership with democratic legitimacy and the capacity to build consensus. The country needs to design a roadmap to achieve broad political agreements, leading to a democratically elected government and providing it with the necessary backing to drive the economic and institutional reforms that recovery demands. No reconstruction program will be sustainable unless it rests upon legitimate institutions, clear rules, and a political pact that offers stability, generates trust, and allows for the mobilization of support from the international community and private investment.

That is why I believe this earthquake has not only moved the earth. It shifted Venezuela’s economic horizon. The projections we made just a week ago likely no longer describe the country we will have at the close of this year. The Venezuelan economy has just entered a new phase, and the speed with which we manage to combine the efforts of the State, the proven capacity of the private sector and civil society, and the decisive support of the international community will determine not only the economic performance of 2026, but the real possibilities for recovery over the next decade.

June 24 (Asia Today) — Economic benefits are emerging as a potential deciding factor in Canada’s competition to acquire a new submarine fleet, with South Korea promoting a broad industrial cooperation package to counter a larger economic-impact proposal from Germany.

Canada is preparing to select a preferred bidder for the Canadian Patrol Submarine Project, a program worth as much as 60 trillion won ($39.2 billion).

German shipbuilder TKMS and South Korea’s Hanwha Ocean are the two qualified suppliers remaining in the competition.

Canadian Secretary of State for Defense Procurement Stephen Fuhr said this week that both proposals meet the Royal Canadian Navy’s requirements, according to industry officials.

With the technical assessment effectively completed, the economic and industrial benefits offered by each bidder could become increasingly important in the final evaluation.

Based on publicly disclosed projections, TKMS appears to have proposed the larger economic contribution.

The German company said its proposal could generate 160 billion Canadian dollars in economic activity and add 86 billion Canadian dollars to Canada’s gross domestic product over the life of the program.

It also projected employment totaling more than 650,000 job-years.

Hanwha Ocean said South Korea’s proposal could support more than 22,500 Canadian jobs annually, equivalent to more than 400,000 job-years, and generate approximately 94.1 billion Canadian dollars in cumulative GDP contributions.

Industry officials said the scale and feasibility of the proposed partnerships may be more important than a direct comparison of headline figures.

Hanwha Ocean has established partnerships with more than 100 Canadian companies, universities and other organizations.

HD Hyundai Group has proposed several billion dollars in cooperation across the energy, commercial shipbuilding and naval sectors.

Hyundai Motor Group is also supporting the broader South Korean proposal through Project Beaver, an initiative intended to establish a hydrogen mobility ecosystem in Canada.

The effort is part of a government-backed package that seeks to position South Korea as a long-term industrial and security partner rather than simply a submarine supplier.

Germany is also offering substantial government and industrial support.

TKMS has emphasized its cooperation with Norway, which is jointly developing and acquiring Type 212CD submarines with Germany.

Norway has offered to share experience involving submarine design and maintenance, repair and overhaul systems.

The German proposal also highlights the benefits of integrating Canada into an existing supply and support network among North Atlantic Treaty Organization allies.

Sustainment carries greatest weight

Canada’s evaluation structure places the greatest emphasis on the ability to support the submarines throughout their operational lives.

Sustainment accounts for 50% of the assessment, while the submarine platform itself represents 20%.

Financial considerations account for 15%, with strategic and economic partnerships making up the remaining 15%.

The weighting indicates that Canada’s primary concern is not simply acquiring advanced submarines but ensuring that it can operate and maintain them reliably for several decades.

Some industry observers have cautioned that excessive attention to economic projections could distract from the program’s core defense objectives.

Both South Korea and Germany have proposed major investments, local partnerships and job-creation plans.

Critics say an escalating competition over economic promises could transform a military procurement decision into a broader contest for foreign investment.

The figures presented by the bidders are also based on different assumptions, industries and time periods, making direct comparisons difficult.

The projected employment numbers may include jobs supported for multiple years rather than distinct permanent positions.

“The technological capabilities, delivery competitiveness and industrial cooperation package offered by South Korean shipbuilders are clear strengths,” a South Korean shipbuilding industry official said.

“Both countries are making an all-out effort, so it remains difficult to predict the outcome before the final decision.”

South Korea stresses delivery and industrial ties

Hanwha Ocean is offering a Canadian version of its KSS-III submarine, a platform developed for and operated by the South Korean Navy.

South Korea has emphasized its shipbuilding capacity and ability to deliver vessels within Canada’s accelerated timetable.

The proposal also includes Canadian participation in construction, maintenance, technology development and supply chains extending beyond the submarine program.

South Korean companies have pursued cooperation with Canadian businesses in steel, automotive manufacturing, artificial intelligence, aerospace, energy and critical minerals.

The package is intended to demonstrate that selecting Hanwha Ocean would produce economic benefits across multiple regions and industries in Canada.

TKMS, meanwhile, is offering a submarine supported by the German and Norwegian governments and an established European defense network.

Its proposal stresses operational compatibility with NATO allies, shared training and access to a multinational submarine supply chain.

Canada is expected to announce its preferred approach between late June and early July. Industry officials said a decision could come as early as this week.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260624010008524

Several Russian regions are facing fuel shortages because of Ukrainian attacks.

A Russian missile attack on the central Ukrainian city of Kryvyi Rih has killed at least three people, as Moscow struggles with the economic strain of the four-and-a-half-year Russia-Ukraine war.

Oleksandr Vilkul, the head of the Kryvyi Rih defence council, said in a post on Telegram on Tuesday that 25 people had been wounded in the attack, which he said used a cluster munition warhead.

“People died within 200 metres [660 feet] of each other because of this barbaric weapon,” Vilkul said, adding that a day of mourning would be marked on Wednesday.

Kyiv has previously accused Moscow of using cluster munitions, which scatter into smaller explosives when dropped.

Reacting to the attack, Ukraine’s President Volodymyr Zelenskyy called for more international pressure on Moscow to end the war and for quicker supplies of air defence systems.

“Every delay in implementing air defence agreements, every delay in supplies to protect Ukraine and Ukrainians is in effect a loss of life,” he wrote on Telegram.

Ukraine announced on Tuesday that its forces had targeted a railway bridge, a power plant and other key infrastructure in Russian-occupied Crimea.

Weakened rouble

Over the past few months, Russia and Ukraine have significantly ramped up attacks. As Moscow launches barrages of strikes on Ukraine, Kyiv in turn has targeted Russian refineries and infrastructure with its own drones.

Ukraine’s drone attacks have led to fuel shortages in Russia. Many regions across the country have reported restrictions on fuel sales and rising prices for oil products, creating concerns about the stability of Russia’s economy.

On Monday, the Moscow Exchange stock index fell by five percent before it rebounded slightly. It is still around its lowest level since March 2023, while the rouble weakened past the 75-mark against the US dollar for the first time since May 6.

The Kremlin dismissed concerns about the rouble’s weakness.

“The stability of the Russian economy, macroeconomic stability, is absolutely ensured,” government spokesperson Dmitry Peskov said on Tuesday.

Meanwhile, efforts to end the war have remained effectively frozen as United States President Donald Trump has shifted his focus to Iran.

Russian Foreign Minister Sergey Lavrov told foreign envoys in Moscow on Tuesday that the Americans seemed to be “abandoning any claim to the role of an objective mediator and are instead pursuing a course of escalating sanctions pressure on Russia”.

June 19 (UPI) — Cuba’s parliament approved a package of 174 economic reforms in just one week, marking the most significant shift in government policy in at least 15 years. Driven by President Miguel Díaz-Canel in response to the country’s deepening economic crisis and mounting pressure from the United States, the plan approved Thursday opens the door to private capital and reshapes the rules governing the island’s economy.

Economists and analysts, however, warned that the real impact of the measures will depend on their implementation and on broader institutional changes that remain absent from the government’s plans.

Cuban economist Alfie Ulloa, a professor at the University of Chile’s Law School, told UPI the reforms represent a significant change in official rhetoric but questioned whether they will translate into meaningful change.

“They are a profound adjustment in discourse and, if implemented, would represent an important adjustment to the model. But for now they are nothing more than another declaration like many made in the past. I do not believe they will be implemented, nor that they will truly free the private sector,” Ulloa said.

The package includes 23 areas of transformation and more than 170 measures aimed at loosening state control over the economy. Among the most significant are allowing direct foreign investment in small and medium-sized private businesses, reviewing activities currently prohibited to the private sector, authorizing direct imports and exports by both state and non-state actors, granting greater autonomy to enterprises and gradually replacing broad subsidies with targeted assistance for vulnerable populations.

The reforms also eliminate broad price controls, a policy Díaz-Canel acknowledged had failed after years of inflation, shortages and expansion of the informal market.

While presenting the plan, the president admitted that part of the country’s current crisis stems from longstanding internal problems.

“There are obstacles that do not come from abroad or from the embargo. There is bureaucracy, delays, regulations that prevent people from producing and decisions that we have postponed,” Díaz-Canel said.

The proposal amounts to an implicit acknowledgment of economic policy failures that Cuban authorities had largely attributed to the U.S. embargo for decades. Analysts noted that several of the measures had been debated previously and rejected by the country’s communist leadership.

Many of the initiatives mirror reforms introduced decades ago in China and Vietnam, although they arrive as Cuba faces one of its worst economic crises since the collapse of the Soviet Union.

Cuban economist Mauricio de Miranda, a professor at the Pontifical Xavierian University in Cali, Colombia, argued in social media posts that the program points toward a transition from bureaucratic socialism to a form of capitalism controlled by political elites.

“It will become the fast track for relatives and close associates of those in power to become shareholders without anyone knowing where their capital came from,” he warned.

De Miranda said Cuba will inevitably need to privatize part of its state-owned assets to attract investment and rebuild its struggling economy. However, he argued that the process lacks the institutional safeguards needed to prevent wealth from being concentrated among groups close to the government.

“Something like this would require a capital market with clear rules, transparency and equal opportunity,” he said.

Questions about legal protections for investors have also emerged as a central criticism.

“None. Cuba is not a state governed by the rule of law. Citizens are completely defenseless before the state,” Ulloa said when asked about protections for potential investors.

He added that investing in Cuba remains highly risky because government power faces few constraints and judicial institutions lack independence.

Cuban economist Pedro Monreal also criticized the process, questioning the secrecy surrounding the package in a lengthy post on X.

“It should not be surprising that the first act of the ‘transformation proposals’ show has reaffirmed public frustration over the secrecy of those proposals,” Monreal wrote.

Monreal also pointed to the failure of the so-called “Monetary Reorganization Task,” a 2021 reform that eliminated the country’s dual-currency system but became associated with surging inflation and declining purchasing power. He argued that experience severely undermines the credibility of the new package.

Despite the skepticism, several specialists acknowledged that some measures could help address urgent problems if fully implemented.

Ulloa said a genuine opening to private investment, particularly from Cubans living abroad, could help revive agriculture, services and food production. He cautioned, however, that critical sectors such as energy, infrastructure, transportation and banking require investment levels that are unlikely to materialize in the near term.

The Cuban government said Thursday that former President Raúl Castro explicitly endorsed the reforms and expressed full support for the package, describing it as what “best serves the Revolution today.”

For critics, that endorsement highlights one of the process’ central contradictions.

The measures acknowledge problems that independent economists have identified for years, yet leave intact the political structure that many blame for creating the crisis.

“The most important point from my perspective is that we are not talking about deep reforms within a new globalized economy. We are simply talking about removing obstacles,” Manuel Cuesta Morúa, vice president of the Council for Democratic Transition in Cuba, told Radio Martí.

He said the reforms arrive too late because Cuba’s economy now operates under extensive U.S. sanctions.

According to Cuesta Morúa, progress will require political and diplomatic negotiations to make the measures viable. He argued that the package merely liberalizes some restrictions but does not yet constitute a genuine economic reform program.

He added that authorities must first address citizens’ immediate needs, create confidence through legal certainty and open Cuban society in broader ways.

Analysts agree that the central question is whether this latest reform effort will produce tangible change or join a long list of initiatives that were announced and later postponed.

Regarding the matter, Vice President JD Vance said, “Right now, we are talking with the Cuban government about how they might change their behavior to achieve that. We’ll see what they do and, obviously, if they do one thing, we’ll do another. If they make smart decisions, we’re going to have a much better relationship with that island.”

Just hours later, details of the measures emerged. For now, however, the White House has remained silent.

In the heart of N’Djamena, the capital city of Chad, children aged 10 to 13 scour the streets, scavenging through heaps of garbage and dirt in search of metal scraps known as “adjith kilos.” After collecting discarded items, the pariah children sell them to local dealers or metal manufacturers to earn a living. The troubling situation depicts the challenges families in the bustling city face, raising questions about child welfare and the socio-economic conditions driving children into such a harsh daily endeavour.

Locals said many parents in Chad are struggling to afford their children’s education due to ongoing economic hardships. They added that children suffer from inadequate food supply, with their parents pushing them into the streets to collect and sell “adjith kilos”. The small amount of money they earn from this work is crucial in supporting their families.

In several areas of the country’s capital city, especially in Walia, Chagoua, Diguel and Gassi, boys and girls spend their days scavenging through trash, visiting construction sites and searching roadsides for precious metal objects and iron pieces. The fruit of their daily labour is eventually sold to iron merchants or some intermediaries for some cash.

“I can make between 500 and 1,000 FCFA (about $2) a day when I am lucky to visit several garbage cans in the quarter,” said Moussa, a 12-year-old picking metals from dumpsites in N’Djamena’s Eighth District. He has been out of school for two years, sustaining his family, including his mother and siblings, through daily scavenging. “If I don’t work, we would not eat,” Moussa added.

For most of the children involved in this activity in Chad, it is not a choice but a necessity. Some of the children financially support their families, while others are simply seeking a way to meet their daily needs. Poverty, unemployment and the difficulties in financing their education constitute the principal causes of the problem, local sources said.

Apart from the economic difficulties, collecting metal exposes children to several risks, including injuries from sharp objects, infections, inhalation of hazardous substances, and road accidents. They also face the risks of economic exploitation and the potential for violence that they may encounter in the streets.

“These children are doing a dangerous job which compromises their health, their education and their development,” said Gapili Lemba Valentin, a civil society activist in N’Djamena. They noted how the disturbing phenomenon is more pronounced in the capital city, where the living conditions of several families have deteriorated.

The situation has a direct effect on children’s education. Many of the child scavengers we spoke to expressed a longing for school. They noted how they have had to put their education on hold to search for metals, which helps support their families financially. Unfortunately, this decision puts their future opportunities at serious risk, according to locals and civil society activists.

Despite Chad’s commitment to the United Nations Convention on the Rights of the Child and other international agreements aimed at combating child labour, challenges remain. The country’s labour code also forbids employing minors in hazardous jobs that could jeopardise their health or development. 

However, the enforcement of these laws is limited. Civil society organisations in Chad have called on authorities to enhance social protection mechanisms, support at-risk families, and foster environments that encourage children to remain in school rather than engage in harmful activities. Observers believe that sustainable solutions require improved household management in precarious situations, as well as the creation of economic opportunities for parents and the strengthening of child protection programs.

June 12 (UPI) — Cuba’s government on Friday announced a broad package of economic reforms aimed at restructuring key aspects of the country’s economic model, just hours after the United States imposed a full financial blockade on state oil company Unión Cuba-Petróleo, or CUPET.

Speaking on state television, Cuban President Miguel Díaz-Canel defended the shift toward decentralization, saying that “these are times when change is necessary.”

The measures are part of the government’s 2026 Economic and Social Program, a roadmap inspired by the economic models of China and Vietnam. Havana says the plan is intended to address the island’s deep economic crisis, high inflation and widespread shortages of goods and services.

The reforms came only hours after U.S. Secretary of State Marco Rubio announced on X sanctions against CUPET, freezing all of the company’s assets under U.S. jurisdiction and prohibiting commercial transactions with it.

Rubio said that “Cuba’s communist elites have turned energy into a tool of social control and profit,” accusing the government of hoarding fuel supplies for its own benefit and using them to repress the Cuban people.

“President Donald Trump wants a new future for the Cuban people with greater freedom and opportunity,” Rubio wrote.

The secretary of state said the sanctions were justified because CUPET operates assets that were allegedly confiscated from U.S. owners decades ago. Washington also warned that foreign companies continuing to do business with the state oil company could face secondary sanctions.

Cuba announced the measures two days after the Miami Herald reported on a proposed commercial agreement between Florida-based Vanguard Energy and Cuban agencies to deliver 250,000 barrels of gasoline and diesel fuel intended exclusively for Cuba’s private sector, small and medium-sized enterprises and humanitarian organizations.

The arrangement included a five-year lease of state-owned storage tanks operated by CUPET. Under the proposal, Vanguard would retain ownership of the fuel to prevent it from being diverted to the Cuban government and would operate outside the island’s banking system.

However, within hours of the agreement becoming public, the U.S. State Department halted the shipment, saying the company did not possess a specific license authorizing the transaction and reaffirming that the Trump administration’s sanctions against Cuba remain fully in force.

Despite the tightening U.S. restrictions, Díaz-Canel rejected suggestions that the reforms were a response to pressure from Washington, describing them as a necessary internal restructuring effort.

The economic plan centers on decentralization and greater openness to investment. Municipal governments and state-owned companies will receive expanded authority over imports, exports and foreign currency management in an effort to reduce bureaucratic obstacles.

The government also plans to ease restrictions on private small and medium-sized businesses, open financial investment opportunities for Cubans living abroad and allow foreign companies to lease agricultural land to boost food production.

To support the reforms, Havana plans a significant reduction of the central bureaucracy, cutting the number of government ministries to 20 from 27 through mergers and eliminations.

Díaz-Canel said Cuba must move toward “new models and new actors” capable of making use of existing infrastructure, acknowledging that sectors such as tourism have been hurt by U.S. sanctions.

“We cannot focus only on the large international hotel chains when many of them, because of pressure from the United States government, have left the country,” he said. “We are developing real estate and tourism projects with new models and other actors that have not traditionally participated in these sectors.”

On energy policy, Díaz-Canel said Cuba would continue shifting toward solar power and renewable energy sources.

“We are going to eliminate, as much as possible, the restrictions that exist on vehicle imports,” he said. “We will continue prioritizing, through tariffs and pricing policies, the importation of electric vehicles powered by solar energy.”

Recent U.S. measures against Cuba have significantly tightened the decades-old embargo through Executive Order 14404 and additional restrictions targeting the energy sector, including CUPET. The sanctions also affect senior government officials, their relatives and military-linked entities.

Washington says the measures are intended to cut off revenue to the Cuban government, encourage political change and punish human rights abuses.

Cuban authorities argue that the restrictions have worsened an already severe economic crisis marked by chronic shortages and power outages that have lasted more than 48 hours in some parts of the island.

International organizations, including the United Nations, have warned about the humanitarian impact on the civilian population.

June 11 (Asia Today) — China’s renminbi, also known as the yuan, has strengthened sharply in recent months as Beijing seeks to elevate the currency’s global standing, but its rapid gains may create new risks for the Chinese economy.

The yuan recently reached its strongest level in three years and three months, prompting some Chinese media to describe the move as an advance by the currency. The trend is expected to continue for the time being.

According to recent reports by Chinese media, including National Business Daily, the yuan was poorly regarded until the end of the last century. Although the official exchange rate hovered around 8.2 yuan per dollar, the currency often traded at about 9 yuan per dollar on black markets in Beijing and other cities.

The yuan’s status began to change after China’s economy expanded rapidly in the early 2000s. After the 2008 global financial crisis weakened confidence in the U.S. economy, the yuan strengthened past 8 per dollar, then 7 per dollar, at times trading in the 6-yuan range.

The currency weakened again early last year and stayed around the 7-yuan level for about a year. Some analysts warned it could fall as low as 7.5 yuan per dollar.

Those concerns proved temporary. The yuan rebounded early this year and returned to the 6-yuan range. It strengthened further and traded around 6.77 yuan per dollar Wednesday, its highest level since Feb. 15, 2023, when it was at 6.8183 yuan per dollar.

Markets widely expect the yuan could strengthen further to around 6.5 per dollar. The currency was worth about 90 won at the end of the last century, but it now trades at about 225 won.

Several factors are driving the yuan’s gains. The prolonged war in the Middle East has increased demand for the yuan alongside the dollar, while China’s large trade surplus, supported by strong exports, has also lifted the currency.

A stronger yuan, however, is not necessarily good for China. It could become a burden for export-dependent companies by making Chinese goods more expensive overseas. Cheaper import prices could also deepen China’s chronic deflationary pressure, which remains a major concern for the economy.

Even so, Chinese economic authorities are not expected to intervene aggressively to slow the yuan’s rise.

Pan Gongsheng, governor of the People’s Bank of China, said during an economic news conference at the National People’s Congress in Beijing on March 6 that the yuan’s recent movement against the dollar reflected China’s stable economic recovery, weakness in the dollar index and a seasonal increase in corporate foreign exchange settlement.

Pan also said China did not need a yuan depreciation, signaling that authorities were comfortable with the currency’s strength.

The yuan’s transformation from a weak and undervalued currency into one with rising global influence has become increasingly difficult to ignore. But its continued ascent could create new pressure on China’s exporters and complicate Beijing’s fight against deflation.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260611010003994

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