France adopted a pioneering tax on internet giants like Google, Amazon and Facebook on Thursday, despite U.S. threats of new tariffs on French imports.

The final vote in favor of the tax in the French Senate came hours after the Trump administration announced an investigation into the tax under the provision used last year to probe China’s technology policies, which led to tariffs on $250 billion worth of Chinese imports.

”Between allies, we can, and we should, solve our differences without using threats,” Bruno Le Maire said. “France is a sovereign country. It will make its own sovereign decisions on fiscal measures.”

The tax amounts to a 3% annual levy on the French revenues of digital companies with yearly global sales worth more than 750 million euros ($844 million) and French revenue exceeding 25 million euros. The tax primarily targets those that use consumer data to sell online advertising.

”Each of us is seeing the emergence of economic giants with monopolistic attributes and who not only want to control a maximum amount of data and make money with this data, but also go further than that by, in the absence of rules, escaping taxes and putting into place instruments that could, tomorrow, become a sovereign currency,” Le Maire said.

The French Finance Ministry has estimated that the tax would raise about 500 million euros annually ($563 million) at first — but predicted fast growth.

The tech industry is warning that consumers could pay more. U.S. companies affected included Airbnb and Uber as well as those from China and Europe.

The bill aims to stop multinationals from avoiding taxes by setting up headquarters in low-tax EU countries. Currently, the companies pay nearly no tax in countries where they have large sales like France.

France failed to persuade EU partners to impose a Europe-wide tax on tech giants, but is now pushing for an international deal with the 34 countries of the Organization for Economic Cooperation and Development.

”The internet industry is a great American export, supporting millions of jobs and businesses of all sizes. Global tax rules should be updated for the digital age — and there is a process to do so underway at the OECD — but discriminatory taxes against U.S. firms are not the right approach,” said Jordan Haas of the Internet Association, an industry trade group whose members include Facebook, Google and Uber.

Another U.S. trade group, the Computer and Communications Industry Association, also said the French proposal discriminated against American companies.

The U.S. investigation got bipartisan support from the top members of the Senate Finance Committee. In a joint statement, Republican Chuck Grassley of Iowa, committee chairman, and Democrat Ron Wyden of Oregon said: “The digital services tax that France and other European countries are pursuing is clearly protectionist and unfairly targets American companies in a way that will cost U.S. jobs and harm American workers.”

Also on Thursday, Britain moved ahead with similar plans as the government published draft legislation for a “digital services tax.” Starting in April, search engines, social media platforms and online marketplaces that “derive value from U.K. users” will be subject to a new 2% percent tax.

Small companies and unprofitable startups will also be spared in the British proposals. The levy will apply to companies with more than 500 million pounds ($626 million) in revenue, if more than 25 million pounds comes from British users.

The tax is temporary and would be replaced by a global deal, which Britain has also been pushing for through the OECD and the Group of 20 major economies.

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From: MeNeedIt

Ride-hailing application Uber, after successful launches in Ghana and Nigeria, is looking to expand in West Africa to Senegal’s capital, Dakar.  But in a city full of taxis, and drivers without smartphones, the Silicon Valley company will have to overcome a lot of challenges to make a profit.  From Dakar, VOA’s Esha Sarai reports.

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From: MeNeedIt

South Korea’s foreign minister told U.S. Secretary of State Mike Pompeo that Japan’s export curbs against South Korea are “undesirable” for trilateral cooperation, South Korea’s Foreign Ministry said Thursday.

Japan tightened curbs last week on exports of three materials crucial for smartphone displays and chips, saying trust with South Korea had been broken over a dispute with Seoul over South Koreans forced to work for Japanese firms during World War II

The restrictions will affect companies such as Samsung Electronics Co. Ltd and SK Hynix Inc., which supply chips to companies such as Apple Inc., and South Korea is stepping up diplomatic overtures to their mutual ally the United States to step in.

Widespread damage

South Korean Foreign Minister Kang Kyung-wha told Pompeo in a phone call late Wednesday that Japan’s trade restrictions may not only cause damage to South Korean companies but could also disrupt the global supply chain and hurt U.S. companies.

Kang “expressed concern that this is undesirable in terms of friendly relations between South Korea and Japan and trilateral cooperation among South Korea, the U.S. and Japan,” the ministry said. Seoul hoped Tokyo would withdraw the curbs and that the situation would not deteriorate further, it said.

Pompeo “expressed understanding” and both agreed to continue to cooperate and to strengthen communication between the three sides, the Foreign Ministry said in a statement.

Kim Hyun-chong, deputy chief of South Korea’s National Security Office, arrived in Washington Wednesday in an unannounced visit and told reporters he was there to meet officials from the White House and Congress to discuss issues that included Japan’s export curbs.
 

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From: MeNeedIt

Britain and Canada established a fund Wednesday to train and provide legal support for journalists in some of the world’s hot spots.  

The two nations hope other countries will also contribute to the Global Media Defense Fund, which will be administered by UNESCO.

Britain is donating about $3.8 million, and Canada kicked in about $765,000. 

Britain also announced it was launching a separate, $18.8 million program to combat what many see as a growing crisis for independent media worldwide. 

The new fund was announced in a keynote address by British Foreign Secretary Jeremy Hunt at the Global Conference for Media Freedom in London. The conference, which continues Thursday, is co-hosted by Canada and Britain.

In his speech, Hunt told the story of reporter Francisco Romero Diaz, who was killed in May  in southern Mexico, to illustrate the dangers faced by a growing number of journalists each year. Last year, Hunt said, nearly 100 journalists were killed — more than twice the annual toll just a decade ago.

Amal Clooney, a lawyer and activist who defended two Reuters reporters recently freed from jail in Myanmar, noted that Washington-based Freedom House, which publishes an annual report on world press freedom, recorded its 13th consecutive year of decline in its global freedom index.

“This decline in media freedom doesn’t only mean that journalists have fewer rights,” she said. “It means we all have.”

Money not enough

The cash pledged Wednesday is earmarked for training journalists, paying legal expenses and creating other support systems.  But some of the reporters and editors covering the conference are calling for more direct and decisive action by world leaders to protect journalists and punish those who kill them.

Clooney and Hunt both noted that more often than not, the killers of journalists aren’t punished for their crimes. That’s especially true when the perpetrators are government officials. And leaders of other nations often appear disinclined to try to hold their counterparts accountable.

“When Jamal Khashoggi, a Washington Post columnist, was tortured to death and dismembered by Saudi Arabian officials in Istanbul, the world responded with little more than a collective shrug,” Clooney said.

During a question-and-answer period, a Canadian reporter asked Canada’s Minister of Foreign Affairs, Chrystia Freeland, why Canada and other Group of 20 countries didn’t strip Saudi Arabia of its hosting privileges for next year’s conference over the Khashoggi killing.   

Freeland explained that Canada expressed its concern for the “atrocious murder” and sanctioned 17 Saudis believed to be connected to the killing. But the G-20, as an economic organization, isn’t the appropriate venue for a values dispute.

“We do need to have places where we attend meetings and talk, even with those countries that are acting in ways that are 100% opposed to our values,” she said.

Agnes Callamard, U.N. special rapporteur on extrajudicial, summary and arbitrary executions who investigated Khashoggi’s slaying, said during an afternoon session that it’s time for countries to stand up to leaders who target journalists and commit other crimes.

“We have to stop the bullies,” she said. “There are bullies around the world using their influence. But they are doing so because we are silent. I’m past calling for hope. We need courage.”

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From: MeNeedIt

The number of people apprehended at the U.S.-Mexico border declined in June, breaking a six-month streak of dramatic increases and prompting the Trump administration to quickly — though cautiously — claim an early victory in its negotiations for stricter border enforcement in Mexico. 

The number of unauthorized border crossers detained by the U.S. Border Patrol in June fell to 94,897, a 28% decline from May, according to Wednesday’s data from U.S. Customs and Border Protection (CBP). 

Apprehensions declined as summer temperatures climbed and Mexico ramped up its own border enforcement following an agreement with the U.S. to avoid a tariff President Donald Trump threatened to levy.

“What we see in June is that our strategy is working. The president’s engagement with Mexico, the deal to enforce immigration security on their southern border … that’s clearly having an impact on the flow,” acting Homeland Security Secretary Kevin McAleenan told CNN on Tuesday, hours after his agency released preliminary estimates for June.

Reasons behind fluctuations

Migrants from Central America’s Northern Triangle countries — El Salvador, Guatemala and Honduras — make up the majority of apprehensions. However, migration numbers fluctuate for various reasons, including changes in season, political climate, policy and weather.

In part, “we generally do have a small decline in June due to the high summer temperatures,” a senior CBP official told reporters, acknowledging that there may be more than one factor causing last month’s decrease in apprehensions.

The official added that the agency is “very optimistic … as Mexico continues to deploy resources to their southern border and continues to beef up their border security.”

The number of apprehensions at the U.S.-Mexico border usually reaches a peak in March, before declining steadily over the summer months. But this year, that reversal did not happen. Instead, that number spiked in May to more than 132,000.

“The logistics of this flow is different than the U.S. has ever seen. And the size is different than Mexico has ever seen,” Andrew Selee, president of the Washington-based Migration Policy Institute, told VOA.

The drop in apprehensions from May to June shows “clearly there’s an effect of Mexico’s enforcement policies,” Selee said. “Is the Mexico enforcement policy coherent? No. They threw together an enforcement response to stave off the threat from the Trump administration. It’s had a dissuasive effect — but only so far.”

In the wake of the tariff threat, Mexico deployed members of its newly formed National Guard — more like a national police force than a military branch — to its northern and southern borders to curb the passage of migrants.

The senior CBP official who spoke to reporters Wednesday said Mexican forces have been able to reduce the number of travelers in large groups attempting to cross into the U.S. In one case, the official said, “instead of having 200 [unauthorized border crossers] to deal with, we ended up having approximately 60 apprehensions.”

Migrant children

Families and unaccompanied children still make up the majority of unauthorized border crossers, a senior CBP official told reporters during a media call Wednesday. 

For years, single adults — largely men — made up the bulk of apprehensions, at a time when agricultural, seasonal work was a major draw. But that has changed over the years, and in 2019 in particular.

U.S. border detention centers were ill-equipped to handle the changed demographics. In recent months, media reports, activists, lawyers and the government’s own internal investigators have criticized the quality of care for those in Border Patrol custody, especially in facilities for children.

From a peak in late May of more than 2,500 children held by CBP, the agency now has around 200, the senior official told reporters. 

The children are being transferred to the U.S. Department of Health and Human Services, the agency tasked with caring for unaccompanied minors until their immigration or asylum cases are adjudicated, or until suitable guardians are located.

U.S. lawmakers will again question the acting DHS secretary in a hearing on July 12 over border policies and the treatment of detained migrants.

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From: MeNeedIt

Volunteers on Wednesday began the cleanup of plastic bags and trash in Japan’s famous Nara Park to try to protect the area’s wild deer.  
 
Park officials said nine of 14 deer that have died since March had masses of tangled plastic in their stomachs, with the heaviest amount weighing 4.3 kilograms (9.5 pounds). 
 
The picturesque park in Japan’s capital is home to more than 1,000 sika deer that are considered sacred and have protected “national treasure” status. 
 
Tourists may feed the deer special crackers, “shika senbei,” that are sugar-free and not wrapped in plastic. Officials of the Nara Deer Welfare Foundation say some visitors offer the animals other types of snacks. 
 
“The deer probably think that the snacks and the plastic packs covering them are both food,” foundation official Yoshitaka Ashimura said. “The only way to prevent this is to remove all the garbage.” 

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From: MeNeedIt

Thailand’s new civilian government will retain the power to arbitrarily detain critics despite the imminent easing of junta-era security controls, prompting warnings from rights groups of enduring “martial law”.

Nearly 2,000 people have been tried in military courts since now-prime minister Prayut Chan-O-Cha seized power in a 2014 coup.

The junta eased a ban on political activities last year in the run-up to national elections and the former army chief phased out dozens of additional junta-enacted orders Tuesday, transferring military cases to civilian courts.

But the government retained over 100 orders — including the right for the military to detain suspects for seven days on national security grounds.

“This is martial law used during an emergency crisis, but we’ve had elections and a new government so why is it still imposed?” said Anon Chalawan, of the legal monitoring group iLaw.

Prayut, who was also officially endorsed by Thailand’s king Wednesday as defence minister, has called his original invoking of junta-era powers as a way of “solving problems”.

But political analyst Titipol Phakdeewanich said the continuing restrictions showed that full democracy remained a distant prospect for Thais.

“I think they know people will be more critical of this government,” he said.

Thailand held elections in March, and Prayut holds a slim majority in the lower house through a coalition of almost 20 parties, which — together with a military-appointed Senate — voted him in as civilian prime minister.

Prayut’s political opponents slammed the process, which included the temporary suspension from parliament of his biggest rival.

Despite questions over his legitimacy, the ex-army chief got down to the nitty gritty of forming a cabinet.

The picks endorsed by the king Wednesday include junta number two Prawit Wongsuwan as deputy prime minister and pro-marijuana Bhumjaithai party leader Anutin Charnvirakul as health minister.

They still need to be sworn in and present policy statements.

The flurry of political activity came after a rash of attacks on pro-democracy activists that remain unsolved.

In late June, activist Sirawith Seritiwat — known for staging anti-junta protests — was put in hospital after being set upon by stick-wielding men.

Police on Wednesday charged eight people for allegedly posting “false information” on Facebook which accused authorities of being behind the attack.

The charge carries a maximum sentence of five years.

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From: MeNeedIt

This article originated in VOA’s Persian Service. Katherine Ahn contributed from Washington.

Qatar’s emir has used his visit to Washington this week to highlight his nation’s growing economic and defense ties with the United States, but has said nothing about his apparent bid to mediate U.S.-Iran tensions.

Sheikh Tamim bin Hamad Al Thani met President Donald Trump at the White House on Tuesday and Acting Defense Secretary Mark Esper at the Pentagon a day earlier, with both sides praising what they called “increasingly close” strategic and defense relations. They cited Qatari purchases of and agreements to buy U.S.-made aircraft, jet engines and missile defense systems, the joint development of a Qatari petrochemicals complex and Qatar’s expansion of the Al Udeid Airbase hosting U.S. forces.

But the U.S. readouts of Al Thani’s meetings with Trump and Esper made no explicit mention of Iran, whose long-running tensions with Washington have soared in recent months. Neither did Trump nor Al Thani say anything about a Qatari desire to mediate between the United States and Iran, as the two leaders spoke to reporters ahead of their White House talks.

Qatar not only serves as a U.S. ally by hosting the U.S. military’s Central Command forward headquarters at the Al Udeid Airbase, but it also serves as Shi’ite-majority Iran’s best friend among Sunni-led Gulf Arab nations that have largely shunned Tehran in retaliation for its support of anti-Sunni insurgencies in the region. Doha has boosted its economic and diplomatic ties with Tehran since 2017, when Saudi Arabia, the United Arab Emirates and Bahrain imposed a land, sea and air blockade on Qatar for its perceived support of terrorism and advocacy of improved ties with Iran.

In a report published Tuesday, Qatari news agency Al Jazeera, founded by the emirate’s ruling family, quoted Qatar University politics professor Majed al Ansari as saying Doha is “actively working in mediation between Iran and the United States.” Al Ansari, a former Qatari foreign ministry official, also described that mediation as likely to be a “main topic” of Al Thani’s meetings with U.S. officials in Washington.

In a Tuesday press briefing at the State Department, spokeswoman Morgan Ortagus said U.S.-Qatari cooperation in dealing with what she called Iran’s “destabilizing activities” in the region would be on the agenda of Al Thani’s meeting with Secretary of State Mike Pompeo on Wednesday.

But some analysts say Al Thani faces multiple obstacles in any effort to mediate U.S.-Iran tensions that have escalated since last year, when Trump withdrew from a 2015 deal in which world powers offered Iran sanctions relief in return for limits on its nuclear program. 

Trump reimposed U.S. sanctions on Iran and called on it to negotiate a new deal, saying the existing one did not do enough to prevent Tehran from developing nuclear weapons or engaging in other malign behaviors, such as developing ballistic missiles and supporting U.S.-designated terrorist groups. 

Tehran has called its nuclear ambitions peaceful and vowed to continue those behaviors. It also claimed responsibility for downing a U.S. drone over the Persian Gulf last month, while denying U.S. accusations that it attacked six foreign oil tankers in the region with mines since May. 

“I expect Iran to be the thorniest of all the issues that the emir and Trump discuss,” said Varsha Koduvayur, a senior researcher at the Washington-based Foundation for Defense of Democracies, in a VOA Persian interview. 

“Unlike Oman or Kuwait, two Gulf Cooperation Council countries that have officially declared themselves to be neutral, Qatar sent its ambassador back to Tehran in 2017, shortly after the Gulf blockade began, and trade with Iran is just continuing to rise. In my view, this doesn’t put Qatar in any sort of neutral, mediating light,” she said. 

Speaking separately to VOA Persian, Matthew Brodsky, a senior analyst at the Security Studies Group in Washington, said he believes the Trump administration is not interested in any foreign mediation of U.S. tensions with Iran at the present time. 

“The point of the (U.S.) strategy is to create the maximum amount of tension so that the leaders in Tehran reach a decision point (that) would lead them to the table to negotiate over not just their nuclear program but their ballistic missiles and of course their very bad regional behavior,” Brodsky said. “So a lessening of the tension … plays against the White House strategy to bring the leaders in Iran to a decision point, and that requires tension,” he added. 

Iranian intransigence is another barrier to mediation, in the view of James Phillips, a senior researcher at the Heritage Foundation in Washington. 

“I doubt that Qatar could play a significant role in easing tensions between the U.S. and Iran, because Iran does not want tensions to be eased right now,” Phillip said in another VOA Persian interview. “As long as Tehran wants to continue escalating this slow-motion crisis, I doubt third party efforts will make much of a difference. But if Iran should change its mind, there may be an opening for such a role,” he said. 

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From: MeNeedIt

Relentless global warming threatens the potential success of a sweeping set of goals established by the United Nations to tackle inequality, conflict and other ills, officials said on Tuesday.

Climate change imperils food supplies, water and places where people live, endangering the U.N. plan to address these world problems by 2030, according to a report by U.N. officials.

Member nations of the U.N. unanimously adopted 17 global development goals in 2015, setting out a wide-ranging “to-do” list tackling such vexing issues as conflict, hunger, land degradation, gender inequality and climate change.

The latest report, which called climate change “the greatest challenge to sustainable development,” came as diplomatic, business and other officials gathered for a high-level U.N. forum to take stock of the goals’ progress.

“The most urgent area for action is climate change,” said Liu Zhenmin, U.N. Under-Secretary General for Economic and Social Affairs, in the report.

“The compounded effects will be catastrophic and irreversible,” he said, listing increased extreme weather events, more severe natural disasters and land degradation. “These effects, which will render many parts of the globe uninhabitable, will affect the poor the most.”

Progress has been made on lowering child mortality, boosting immunization rates and global access to electricity, the report said.

Yet extreme poverty, hunger and inequality remain hugely problematic, and more than half of school-age children showed “shockingly low proficiency rates” in reading and math, it said.

Two-thirds of those children were in school.

Human trafficking rates nearly doubled from an average 150 detected victims per country in 2010 to 254 in 2016.

But it was unclear how much of the increase reflected improved reporting systems versus an increase in trafficking, said Francesca Perucci of the U.N.’s statistics division, who worked on the report.

“It’s hard to exactly distinguish the two,” she said at a launch of the report.

But climate change remained paramount.

Greenhouse gases have continued to climb, and “climate change is occurring much faster than anticipated,” the report said.

At this week’s goals summit, 47 countries were expected to present voluntary progress reviews. Almost 100 other countries and four cities including New York have done so.

Earlier U.N. reports said the goals were threatened by the persistence of violence, conflict and lack of private investment. Outside assessments have also cited nationalism, protectionism and insufficient funding.

The cost of implementing the global goals has been estimated at $3 trillion a year.

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From: MeNeedIt

In the Dutch port city of Rotterdam, nine “water plazas” have been created that soak up excess rainfall while offering people a green space to meet and children to play.

The city is also planting gardens and putting solar panels on a growing area of its nearly 20 square kilometers (8 square miles) of flat roofs.

Paris, meanwhile, is redesigning and opening green schoolyards as cooler places for locals to escape extreme heat, while in New Zealand, Wellington is rolling out neighborhood water supplies to keep the taps on when an earthquake hits.

More than 70 cities that are part of the 100 Resilient Cities (100RC) network, set up in 2013, have crafted “resilience strategies” that include about 3,500 activities designed to combat shocks and stresses – everything from floods to an influx of refugees.

The United Nations estimates that by 2050 nearly 70% of the world’s population will live in cities, which are increasingly impacted by extreme weather and sea level rise, while producing about 75% of planet-warming emissions.

Michael Berkowitz, president of 100 Resilient Cities, told a gathering of the network’s cities in Rotterdam on Tuesday that efforts to build resilience had now become established as an approach to improving quality of life in cities.

Those efforts to keep people safe and well in the face of rising climate, economic and social pressures will continue, despite the closure this month of the organization that helped them craft those plans, officials said.

At the end of July, 100RC will shut its offices after the New York-based Rockefeller Foundation said in April it would no longer fund the body, having given about $176 million for its work.

That funding helped pay initial salaries for chief resilience officers in member cities, for example, though about 80% of the cities now have made the role a part of their staff, 100RC officials said.

The Rockefeller Foundation said on Monday it would provide an additional $8 million over 18 months to help 100RC cities and their chief resilience officers transition to a network they will lead themselves.

“Ultimately, we aim to ensure continued collaboration and sharing among cities to address some of their most pressing challenges,” Rockefeller Foundation President Rajiv Shah said in a statement.

Expansion Ahead?

Krishna Mohan Ramachandran, chief resilience officer for the Indian city of Chennai, which has just launched its resilience strategy, said he was relieved it would be able to carry on with planned projects.

Those include conserving scarce water, putting vegetable gardens in schools, and finding less risky but nearby locations for flood-threatened communities, among others.

Rotterdam chief resilience officer Arnoud Molenaar, who led colleagues in lobbying for extra funding from the Rockefeller Foundation, said resilience work had garnered more support and created more value in cities than was often appreciated.

The Rockefeller bridge grant meant the network would now have time to raise more money from donors and others to stand on its own, and expand partnerships with politicians, communities and businesses, Molenaar said.

Elizabeth Yee, who moved from 100RC to The Rockefeller Foundation to manage its climate and resilience work, said there was a “huge” amount of money looking for resilient urban infrastructure projects, but cities often struggled to meet investor requirements.

She said a key to finding funding was to design a bus rapid transit system or a clean power plant, for example, to also create local jobs and make communities more economically secure.

“I am hopeful that we can keep helping cities develop those projects and getting them ready for bigger, broader investment,” she told the Thomson Reuters Foundation on the sidelines of the conference in Rotterdam.

Cities in the 100RC network have so far raised $25 billion from their own budgets, businesses and other sources to put their resilience plans into practice, 100RC’s Berkowitz said.

In a decade’s time, he said, he hoped urban resilience – with its holistic approach to multiple, modern-day stresses – would have become “an absolutely essential part of city government.”

For now, as cities rapidly expand and climate threats grow, much more such work will be needed, he said.

“Even 100 cities is a ridiculously small number of cities, compared to the world’s 10,000 cities,” he said. “We need more effort if we’re going to really win the battle of the 21st century, which is going to be fought in cities.”

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From: MeNeedIt

The organizers of the beleaguered Woodstock 50 festival said on Tuesday they still hoped to get a permit for the event due to take place next month despite being turned down at a second site.

Authorities in the town of Vernon in upstate New York turned down the organizers’ application to stage the three-day event, marking the 50th anniversary of the famed 1969 “peace and music” festival.

Oneida County Administrator Anthony Picente Jr. told Hollywood trade publication Variety that efforts to stage the festival at Vernon Downs for some 65,000 people at short notice had been “chaotic.” Picente said he thought the chances of it taking place were “highly unlikely.”

However, Woodstock 50 producers said they would appeal.

“With a venue chosen, financing assembled and many of the artists supporting Woodstock’s 50th Anniversary event, the organizers are hopeful that their appeal and reapplication” will prevail, the producers said in a statement.

Tickets have yet to go on sale.

The Aug. 16-19 festival was originally due to take place at the Watkins Glen motor racing venue in upstate New York with a line-up including Jay-Z and Miley Cyrus.

Watkins Glen in June pulled out, throwing the festival into further uncertainty after the original investors withdrew their support, citing problems with permits and arranging security and sanitation.

Woodstock 50 announced in March that more than 80 musical acts, including 1969 festival veterans John Fogerty, Canned Heat and Santana, would take part. Some 100,000 fans, including campers, were originally expected to attend, but that number was later reduced to 60,000.

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From: MeNeedIt

Mexico’s moderate Finance Minister Carlos Urzua resigned on Tuesday with a letter that shocked markets by citing “extremism” in economic policy, before President Andres Manuel Lopez Obrador quickly named a well-regarded deputy minister to replace him.

In the unusually strongly worded resignation note made public on his Twitter account, Urzua said the government was forming economic policy without sufficient foundation.

“I’m convinced that economic policy should always be evidence-based, careful of potential impacts and free of extremism, either from the right or the left,” Urzua wrote. “These convictions did not resonate during my tenure in this administration,” Urzua said.

He also said there were what he called conflicts of interest in the appointment of some ministry officials imposed on him by influential members of the government. He did not give more details.

The Mexican peso fell over 2% on the news and the benchmark stock index slid almost 1.5%. Both recovered a little after Lopez Obrador quickly promoted Deputy Finance Minister Arturo Herrera to the top job.

Well known to investors and seen as a competent economic manager, Herrera now has the task of reviving economic growth while meeting a 1 percent primary budget surplus, kickstarting flagging investment and fending off downgrades from ratings agencies worried about indebted state-oil company Pemex.

“[Herrera] is a well-known figure with good dialogue with market participants and is not perceived as a … dogmatic individual,” said Alberto Ramos, head of Latin American research at Goldman Sachs.

“But in light of the unusual content of Urzua’s resignation letter there is out there the lingering question of who is ultimately in charge of running economic policy,” Ramos said.

Academic hawk

Urzua, a slightly disheveled former academic prone to mild verbal gaffes, was a very different finance minister from Mexico’s recent tradition of slick technocrats who spoke the language of Wall Street.

However, he was seen by markets as a moderate whose commitment to fiscal discipline was a bright spot in the administration of Lopez Obrador, which has frequently buffeted markets with surprise policy decisions.

Before the government took office on Dec. 1, Urzua was tasked with meeting with dozens of investment funds to convey that the government was center-left, rather than leftist.

On his watch, however, Urzua was hit by a sovereign debt downgrade and contracting economic growth as he stuck to fiscal targets while setting aside money to support Pemex and Lopez Obrador’s plans to splurge on a new oil refinery.

A 64-year-old economist, Urzua is an old friend of the president and served as his finance minister when Lopez Obrador was Mexico City’s mayor.

Urzua deeply cut back spending programs in a strategy aimed at cleaning out corruption and largesse with a new, more centralized model of assistance. He also began a program of centralizing procurement, in another drive for efficiency and clean government.

Both actions have been blamed for shortages in areas such as healthcare, where lack of medicines led to the high-profile resignation of the public health system chief earlier this year.

In a video message to announce his successor, Lopez Obrador said Urzua was not comfortable with the decisions being taken to upend what the president frequently calls the neoliberal era in Mexico, starting in the 1980s.

“We are committed to changing economic policy that has been imposed for the past 36 years,” Lopez Obrador said. “We can’t put old wine in new bottles.”

“We believe there will be economic growth, that we will progress in the country by fighting corruption and … with a policy of austerity,” the president said.

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From: MeNeedIt