06052023 BUSINESS

Gov’t ready to guarantee Nassau’s $290m hospital

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Government is prepared to guarantee the $290m financing for New Providence’s new hospital, a Cabinet minister revealed yesterday, adding:

“This is a worthwhile investment for the Bahamian people.”

Dr Michael Darville, minister of health and wellness, told Tribune Business “there’s a lot of appetite” - and that the Davis administration has been “getting some good hits” - from potential financing sources after switching away from the previously-planned publicprivate partnership (PPP) model for the new hospital’s development. That would have involved a private sector group financing, constructing and operating/

• Minister: ‘Real money set aside’ for facility

• Switch from PPP model as costs too high

• Talks with Sir Franklyn on Perpall Tract site

managing the facility, but he explained that the Government had moved away from this approach because it felt the interest rates, or cost of financing, available under the PPP model was too high.

Confirming that he is now moving to “finalise” the project’s financing, Dr Darville told this newspaper that while there is “money out there” it has to be at a price/cost that Bahamian taxpayers

can bear. To achieve that goal, he explained that the Davis administration felt the project is of such critical importance to the population’s health and well-being it is prepared to underwrite any borrowed financing with a government guarantee - even though this will add to the $11bn national debt.

The new hospital’s total projected cost, $289.399m, is revealed for the first time in documents

Key tax arrears jump $230m to hit $1.13bn

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

TAX arrears owed to the Government from three key revenue streams increased by a collective $230m during the first nine months of the current fiscal year to hit $1.13bn at endMarch 2023.

arrears jumping from $196.814m to $287.171m.

accompanying the 20232024 Budget. Some $2m, and $8m, of that sum will be spent on “preparatory works” during the 20232024 and 2024-2025 fiscal years, respectively, with construction projected to ramp up in 2025-2026 with an $160m outlay.

The minister said these figures, together with those for the Grand Bahama hospital, “demonstrate

20% of Gov’ts fixed costs go to debt bill

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

ONE out of every $5 spent by the Government on its recurrent costs during the upcoming 2023-2024 fiscal year will go towards paying the $612.726m interest bill on its outstanding $11bn-plus national debt.

Documents accompanying the 2023-2024 Budget reveal that 19.99 percent of recurrent, or fixed cost, spending is earmarked to cover debt servicing costs which remain the largest single line item in the Davis administration’s

expenditure Budget for the 12 months to end-June 2014.

And, with subsidies to loss-making state-owned enterprises (SOEs) consuming a further $408.098m, some $1.02bn of recurrent spending - equivalent to one-third of the total, or one out of every $3 spent by the Government - will go on this and interest payments alone.

The Budget forecasts reveal that central government debt, in absolute terms, is not forecast to peak until the upcoming fiscal year when it is

SEE PAGE B4 SEE

Property tax cap up 25% to hit $150,000

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

BAHAMIAN realtors have given a mixed reaction to the Government’s decision to increase the annual real property tax cap by 25 percent to $150,000.

The Davis administration, in amendments to the Real Property Tax Act tabled in the House of Assembly to accompany the 2023-2024 Budget, has moved to further increase the maximum amount that can be paid by one taxpayer after doubling this sum during the previous fiscal year.

“Clause two of the Bill makes provision for the increase of the maximum

tax on owner-occupied property from $120,000 to $150,000,” the Real Property Tax (Amendment) Bill 2023 stipulates. The $30,000 increase, which will take effect from July 1, 2023, comes swiftly behind the prior year’s $60,000 jump

Documents accompanying the 2023-2024 Budget reveal that unpaid VAT, real property tax and Business Licence fees combined, together with associated fines, penalties and surcharges, rose by around 25 percent compared to the total $900.391m arrears at end-June 2022.

While outstanding VAT remained relatively steady, the Department of Inland Revenue (DIR) figures showed a further surge in real property tax delinquency and non-payment. Commercial property tax delinquency was shown as rising by 45.9 percent during the nine months to end-March 2023, with

Outstanding property taxes owed on foreignowned vacant land jumped by 26.4 percent over the same period, rising from $214.493m to $258.177m, while delinquencies for owner-occupied properties surged by 31.1 percent to $163.855m from $124.436m at the close of the 20212022 fiscal year. Property tax arrears on residential property that is not owneroccupied increased by 17.2 percent during the period, growing from $149.52m to $175.296m.

Meanwhile outstanding Business Licence fee payments increased by almost $30m, or 53.3 percent, during the first nine months of the 2022-2023 fiscal year to $86.13m. This compared to $56.18m at end-June 2022.

The data, provided by the Department of Inland Revenue, and based on world tax systems, is admittedly a one-time snapshot

• Gov’t to forego $318.449m in tax concessions

DR MICHAEL DARVILLE

DAVID MORLEY

$5.74 $5.85 $5.74 $5.95

ARAWAKX ACCOUNTS UNFROZEN FOLLOWING BATTLE WITH FINANCIER

A BAHAMIAN crowdfunding platform yesterday confirmed multiple accounts it holds with Bank of The Bahamas have been unfrozen after a dispute with one of its founding financiers impacted “probably thousands” of investors for months.

D’Arcy Rahming Sr, ArawakX’s chairman and chief executive, told Tribune Business the company and its parent, Mdollaz Ltd, had ultimately prevailed in a battle for control of the crowdfunding platform with one-time Colina Insurance Company president, James Campbell. The fight with Mr Campbell, understood to have been an ‘angel investor’ who provided ArawakX with a portion of its start-up funding, resulted in multiple bank accounts held with BISX-listed Bank of The Bahamas being temporarily frozen. Mr Rahming

confirmed the freeze, which impacted monies belonging to crowdfunding investors as well as three companies that sought to raise financing via this mechanism, had lasted for eight months. Justice Simone Fitzcharles, in a May 16, 2023, Order that also mentions Mr Campbell by name, ruled that Bank of The Bahamas “shall forthwith restore the claimant’s [ArawakX] access to, and operation of, all of the accounts” that had previously been frozen.

The Supreme Court judge also ordered that Mr Campbell, “and all persons claiming under, by and through Mr Campbell, shall not continue or subsequently prosecute” any claims against the BISXlisted institution as set out in “the Higgs and Johnson letter dated October 28, 2022”.

Bank of The Bahamas is also “restrained from restricting, prohibiting or otherwise interfering with [ArawakX’s] operation of, and access to, all of the accounts” subject to the action. Justice Fitzcharles also ordered that ArawakX and Bank of The Bahamas’ legal costs be paid by Mr Campbell, who is the father of Centreville MP and minister of state for legal affairs, Jomo Campbell.

Mr Rahming yesterday acknowledged the account freeze could have inflicted significant damage on Arawak X, its crowdfunding model and investor confidence in the wider Bahamian capital

markets had continued for an extended period of time.

“We are the protecters of the capital markets,” he told Tribune Business. “We take it very seriously, our responsibilities to issuers and individual investors. People work hard for their money, and when they invest their money we have to make sure it’s secure and protected.”

Asked what had prompted the freezing of the accounts, and the assets they contained, Mr Rahming replied: “They were holding up some client accounts. Jimmy Campbell was an early investor in our company. He felt he had control of the company, and he did not have control of the company. That’s what the ruling said.

“Those are client accounts, not ArawakX accounts. We have to defend the rights of our issuers and investors. We had to step in and take court action, and the court has agreed with us.” Mr Rahming did not place a

dollar value on the collective worth of the assets that were unfrozen, but it appears likely the facilities may have been omnibus escrow accounts that held monies on behalf of small retail investor participants in crowdfund offerings. The ArawakX chief, arguing that the reasons given by Mr Campbell and Bank of The Bahamas for freezing the accounts “make no sense legally”, confirmed that the hold had lasted for eight months before being released.

“From the issuer side, three issuers [companies] were affected,” Mr Rahming told this newspaper. “From the client side, probably thousands. We had to fight that. We are the protectors of the markets. We cannot allow that at all.

“We want the clients to know everything is secure, and all their funds and investments are secure.

It’s very important for us to realise that. We’re fully regulated, and have been working with the Securities

Ensuring postal service embraces 21st century

Despite being a critical driver of economic growth, The Bahamas’ postal service is currently lagging in its operations. It is responsible for postal services and inter-island passenger freight and mail services, and currently falls under the responsibility of the Ministry of Transport and Housing. In recent years, it appears this critical component of our society has received less than the required attention by previous and current administrations. Reforming the postal service in The Bahamas could help improve its efficiency, reduce costs and ensure its long-term sustainability, while meeting the needs of customers and remaining competitive in a rapidly-changing market. Therefore, in this segment, we will consider how to reform postal services and why this is important.

The lack of a dedicated building for the General Post Office in Nassau is a major obstacle to improving postal services in The Bahamas. In 2022, the minister of transport and housing,

JoBeth Coleby-Davis, who has ministerial responsibility for the post office and postal services generally, announced that the Government was seeking private sector proposals to finance and construct a new home for the General Post Office via a public-private partnership (PPP) arrangement. The General Post Office is currently located in a leased space at the Town Centre Mall. However, the minister argued that this is not a sustainable solution, as it raises questions about

the financial viability of the postal service. Currently, the Government spends an estimated “$820,083.60 each year to use Town Centre Mall, including the annual rent, VAT and additional annual rents due”. These funds, Mrs ColebyDavis said, could be better used towards constructing a state-owned enterprise (SOE) for postal services, rather than paying for a leased space.

In addition to having a centralised location, it is crucial to enhance the outdated infrastructure that is currently being used to provide postal services. In 2023, it is imperative that services in The Bahamas keep pace with the latest technology. Therefore, if a new Post Office is to be constructed, the quality of the infrastructure must be a top priority, as outdated networks could result in slower delivery times and increased costs. Upgrading the infrastructure would not only improve the efficiency of the postal service, but also help to reduce costs.

It is also important to keep up with the latest

technology in postal services, as traditional postal services face competition from digital communications. The rise of digital communications, such as e-mail and messaging apps, has led to a decrease in demand for traditional postal services. However, in many of the Family Islands in The Bahamas, limited access to technology and digital communication tools means that postal services remain a crucial means of communication for individuals and businesses. Furthermore, postal services are still a cost effective way for small businesses to send and receive products, and individuals may use them to pay bills and order goods.

Digitisation is key Embracing technology is one of the best ways to achieve reform for postal services in The Bahamas. By adopting new technologies such as digital tracking systems, online payment systems and mobile delivery tools, the postal service could streamline its operations, reduce costs and improve the customer

HALKITIS: WE’LL MEET TARGETS - AND BEAT THEM

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

A CABINET minister said that the government will “achieve” and “surpass” the budget targets in terms of the deficit with a goal to get the debt to GDP down to 50 percent by 2031.

Michael Halkitis, Minister of Economic Affairs, told the Prime Minister’s Office’s weekly media briefing that the debt to GDP is now in the “low 80s”, coming down from more than 100 percent just a few short years prior.

Mr Halkitis also said:

“We are on track, but there is a lot of work left to be done so that we can meet our targets. I want to say two things, in terms of spending, because I know as the budget commences in the immediate aftermath or the immediate reaction to the budget, there’s always some allegation or statement that the government is not controlling its

spending. But if you look at this budget, this upcoming budget next year, we anticipate spending to increase over this year’s level by $12m.

“So government spending is budgeted increased by $12m and let me put that in some context: For government spending in this fiscal year, is anticipated to be $3.074bn and next year $3.085bn.

He continued, “An increase of around $12m. That is less than one half of a one percent increase

exactly 0.4 percent increase, less than half of one percent. If you look at it, if you adjusted for inflation, it’s actually a cut in spending.”

Simon Wilson, the financial secretary, meanwhile added that revenues have been boosted by the resumption of BTC’s dividends from Liberty Global, the first time in five years the government has received dividends from the telecommunications provider. He added that for this year revenue is growing at 11 percent and for the upcoming year revenue growth is projected at ten percent off of the back of increases tax collection in real property taxes and a consistent approach to tax collection overall.

There will also “not be an increase in broad base taxes”, but rather there will be increases in certain fees and levies, particularly, an addition of an immigration work permit levy and an increase in the departure tax, both of which Mr Halkitis said is “targeted at foreigners”, primarily.

He also said: “The other point I just wanted to touch on is this whole issue of aggressive tax collection, as the Prime Minister said, the revenue agencies are doing their jobs and collecting what is due and outstanding, they stand ready for those who need to have to structure a payment plan, forgiveness or whatever, they stand ready to work with them in that area. But, our efforts are aimed at those who are, you know, chronic delinquents who are really demonstrating no willingness, even though they might have the ability, no willingness to pay and so we will see our enforcement efforts continue, and they have been bearing fruit.

“Next year, we project a budget deficit less than one percent and just put that into context just two years ago, our budget deficit was over 13 percent. So a budget deficit of less than one percent next year, meaning that we anticipate the following 2024/2025 to at least have a balanced budget.”

Commission and auditors to make sure everything was appropriately done.

“As you can imagine, there are severe damages but we are dedicated to our clients and to our markets. There are so many people calling us every day for help with their businesses, and we are willing and able to help them,” Mr Rahming continued.

“This is a big market that is developing. We have $80m in needs, 28 clients with excellent ideas and companies, all Bahamian, and we have 3,600 investors registered with us. This is something very good for The Bahamas, and we are working hard to the great satisfaction of investors.”

Mr Campbell, who was ousted from his Colina Insurance Company post some 15 years ago after losing a corporate battle with then-business partners, now A. F. Holdings principals, Emanuel Alexiou and Tony Ferguson, could not be reached for comment before press time last night.

experience. In addition, exploring new revenue streams could help supplement the postal service’s income. For instance, offering additional services such as passport applications and money transfer services could generate additional revenue and help ensure the financial sustainability of the postal service.

The National Development Plan

While the National Development Plan (NDP) does not specifically address postal service reform, it does include several goals and strategies that could indirectly support the modernisation and improvement of the postal service. For example, the NDP highlights the need to modernise and upgrade the country’s physical infrastructure, including transportation and communication networks. This could potentially include investments in the postal service’s infrastructure, such as upgrading sorting equipment and vehicles to improve delivery times and accuracy.

The NDP also emphasises the importance of digital transformation, and the development of a knowledge-based economy. This could support the adoption of new technologies and digital tools within the postal service, such as digital tracking systems and online payment systems, which can help streamline operations and improve the customer experience. In addition, the NDP highlights the need to promote economic growth and diversification, which could indirectly benefit the postal service by creating new business opportunities and increasing demand for its services

Conclusion

In closing, reforming the postal service in The Bahamas will require a combination of investment in infrastructure, embracing new technologies, exploring new revenue streams, improving customer service and potentially establishing a state-owned enterprise (SOE). By implementing these reforms, the postal service could become more efficient, cost effective and better able to serve the needs of the community.

CULTIVATION CENTRE TO OPEN BY END OF THE MONTH

SWEETING:

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

THE GLADSTONE Road cultivation centre is 90 percent complete and will be ready for opening by the end of the month.

Clay Sweeting, Minister of Agriculture, Marine Resources and Family Island Affairs, said at the Office of the Prime Minister’s press briefing that the 12,000ft centre will have food processing kitchens, a produce exchange and office space and will be a “general source for food production” for the country.

The ministry has also acquired a building for a cultivation centre in Hatchet Bay, Eleuthera, which it expects to break ground on by the end of this summer.

The ministry also continues to receive animals to distribute to farmers throughout the country as well. “Earlier this year,

we received 260 sheep and goats for distribution and to also build capacity at the Gladstone Road agricultural centre (GRAC),” Mr Sweeting said.

He added: “Our layer programme, as we look at this holistic approach on Golden Yolk and what we’re doing at BAMSI (Bahamas Agricultural Marine Sciences Institute) our layer programme must continue. We received more than 4,000 chicks in the past few weeks that we are continuing to distribute to farmers across The Bahamas.”

Mr Sweeting said: “In February, the team at the BAIC (Bahamas Agriculture and Industrial Corporation) have been anticipating the arrival of the new feed mill, which should arrive in about six to eight weeks and this will be installed at the site at GRAC.

D’ARCY RAHMING, SR.

MICHAEL HALKITIS

PETROLEUM RETAILERS AGREE TO ‘PHASED IN’ MARGIN INCREASE

By NEIL HARTNELL

BAHAMIAN petroleum retailers yesterday said they will accept a “phased in” 30 cent per gallon margin increase as they urged the Prime Minister to meet with the sector this week “to put this baby to sleep”.

Vasco Bastian, the Bahamas Petroleum Retailers Association’s (BPRA) vicepresident, told Tribune Business that the margin increase they are seeking “doesn’t have to be done all at once” to ease the burden on Bahamian consumers and businesses.

Rather, he indicated that gas station operators would accept a series of phased rises that eventually reach their sought-after 30 cents per gallon of gasoline margin increase target. Mr Bastian’s comments came after Michael Halkitis, minister of economic affairs, last Thursday again reiterated the Government’s steadfast opposition to granting any margin increase because this would automatically raise fuel costs for Bahamian motorists.

“Ask Mr Halkitis for me if he will ever give an opportunity for us to meet again so that we can phase in the increase,” the BPRA vicepresident said yesterday.

“We don’t have to do it all at once. We can phase it in. We’re in very serious times, very dire times.

“All of the trade unions got their increase, all of the taxi drivers got their increase. We just need to continue to operate to provide essential services for the entire Bahamas. We’re asking the Prime Minister if we can meet with him this week to phase-in an increase. He doesn’t have to do it all at once.

“We’re sending out our full request to meet with him to resolve our proposal, their counter-offer, and let’s put this baby to sleep. We have the utmost confidence in the Prime Minister, support his cause, and ask him to work with young Bahamians providing an essential service. That’s all we’re asking for,” Mr Bastian continued.

“They have helped the unions, the taxi drivers. Help us now. We’re Bahamians. Our industry is 100 percent Bahamian-owned. That’s all we ask. I plead with the Prime Minister; please help us Mr Prime Minister.” Mr Halkitis, though, last week reiterated the Government’s oft-repeated stance that it is determined not to grant the dealers’ margin increase demands although it is prepared to explore other forms of assistance.

Speaking at the Prime Minister’s Office’s media briefing, the minister rejected assertions that the Government had taken “no action” to address the dealers’ plight. This stems from the fact gas stations have been operating at the same price-controlled fixed margins for the past 12 years, 54 cents per gallon of gasoline and 34 cents for diesel, and these are now no longer sufficient to cover operating costs that continue to rise due to inflation and the cost of living crisis.

Mr Halkitis, pointing out that the Government quietly last year provided gas station operators with $6m in collective relief - $5.5m in cash, and $0.5m in rebates on taxes owed - said it was “beyond wrong” to assert that no help had been given.

“What we are saying to the retailers, and I’ll say it one more time.... It’s not the intention of the Government to do anything that will lead to a direct increase in the price at the pump for the public,” he asserted. “Alright. I saw in the paper

yesterday where they wanted a 30 cent increase.

“You know what a 30 cent increase means? That means gas goes up for you by 30 cents [a gallon]. Not to Michael Halkitis. It goes up for 400,000; for 397,000 of us.” The minister then sought to direct public attention away from the Government’s role to what he termed the petroleum dealers’ “onerous” business relationships and terms with their landlords - the three oil majors, Rubis, Esso (Sol Petroleum) and Shell (FOCOL Holdings).

“What we continue to do. Our discussions with them, yes, we understand you have some private business relationships that are onerous to you. You pay a lot of rent to your landlord, your landlord takes some percentage off the top of all your sales. You’re in a bad situation. That’s why we gave them the rebate,” Mr Halkitis said.

“We even asked them:

‘When we give you this rebate, can we see a reduction in the price?’ Well, that didn’t happen for whatever reason. What I’m saying is that it’s not correct to say we’ve done nothing. Our view is we don’t want to do anything that increases the price of gas at the pump for you the public, businesses, the bus driver, the fisherman. It’s counter-productive.

“So what we continue to do is: Let’s talk and see how we can work out the situation. There’s [also] this point that continues to be raised. Why doesn’t the Government reduce its cut, so to

speak. There’s even been an accusation that the Government is benefiting from the high price. There’s nothing further from the truth, and I answer it this way,” he added.

Mr Halkitis said that reducing the taxes and revenues the Government receives from gasoline sales would mean it needs to make up the shortfall elsewhere to continue delivering public services to the Bahamian people. This, he added, could force it into borrowing to make up the difference,

which in turn would increase the already-high $11bn-plus national debt that persons are “very concerned about”.

The Government receives $1.16 in duty for every gallon sold, plus 10 percent VAT, so the Public Treasury’s income does increase when pump prices rise. The petroleum dealers have also not suggested that the Government reduce its revenue take for their benefit.

“It’s not in our contemplation to grant a margin increase that would lead to an increase in the price at

the pump for the public,”

Mr Halkitis reiterated. “The price of gas goes up for everybody. Not doing that, as time goes on, things evolve and we see some developments in the market, perhaps they’ll be an opportunity to do something that does not lead directly to an increase in prices at the pump. “We think that’s a perfectly reasonable position, and that’s our position. We continue to work with them, but to talk about a 30 cent increase. No.”

to the Bahamian people this is not just talk; real money has been set aside” to upgrade and improve public healthcare facilities in the country’s two major islands.

Dr Darville confirmed that a 50-acre site in the Perpall Tract area, near the wellfields and to the east of the road that connects the Saunders Beach roundabout with JFK Drive’s ‘six-legged’ roundabout, has been selected for the new New Providence hospital. He also affirmed, in response to Tribune Business questions, that 14 acres of the site have been obtained via negotiations with Sir Franklyn Wilson, the Arawak Homes and Sunshine Group of Companies chairman.

The Perpall Tract hospital will feature maternal, child and adolescent care, along with the blood bank and advanced diagnostic facilities. It will also provide “mass casualty” facilities in terms of sufficient bed and care capacity in the event of emergencies such as the recent COVID-19 pandemic.

GUARANTEE NASSAU’S $290M HOSPITAL

Dr Darville said the new hospital will free up space at Princess Margaret Hospital’s existing facilities for greater medical and surgical services expansion, adding that he was moving to ensure there is adequate staffing for the Government’s hospital plans amid the ongoing “bleed” of talent that is being lost to the US, Canada and other healthcare markets.

“We are pretty much advanced,” the minister told Tribune Business yesterday.

“We have completed the feasibility study with our plans, and we have already selected the land. It was a drawn-out process because the land is close to the Perpall Tract waterfields.

“We had about four potential sites. We did investigations on some of the other sites, but they had some sink holes and we had to look for firmer ground.”

Dr Darville said the land allocated for the Perpall Tract hospital had previously been earmarked for development as a housing subdivision, and geo-technical studies had confirmed the site is “rock solid” and suitable for construction of

a multi-level complex such as hospital with “no sink holes” present.

“We have 50 acres of land,” the minister added.

“We may lose a few acres because some are in close proximity to the wellfields, but we have adequate land for the first phase and second phase construction.”

Architects’ drawings, renderings and the feasibility study have now been completed, while an agreement has been reached that the Government will compensate Sir Franklyn and his companies for the 14 acres acquired.

“We had a negotiation ongoing with him,” Dr Darville said of talks with the Arawak Homes chair. “He has agreed in principle that he would allow us to continue the project. Our job is to now finalise the equity: A payment or a land swap. We negotiated that this was the best way to go. He has agreed in principle, and conceded, to allow the project to go forward pending us giving him compensation.”

told Tribune Business: “Now we are out on the international market with the feasibility study look for low interest rate financing. We spent almost a year looking at potential PPP projects, and potential investors, but could not get interest rates that were palatable. Everything seemed too high out on the international market”

As a result, he said the Davis administration had determined to seek the targeted low-cost financing on its own - with the possibility of a supporting government guarantee - given that the successive interest hikes by major global central banks to combat inflation have moved borrowing costs higher and against The Bahamas’ favour.

hospital financing, “and it’s been very favourable thus far, but we’ve not finalised funding for the New Providence hospital... I’m now at the financing stage. We are getting some good hits. I was hoping to make an announcement in the Budget. It’s a bit premature, but things are looking good.

thought we would through the PPP, so we made the decision that something of this importance is a worthwhile investment for the Bahamian people.

“We have made a decision to seek financing and be prepared, if we have to, to guarantee a loan from the Government level.” The Budget documents also confirm that the Government’s “equity contribution” to Freeport’s new hospital, via the Grand Bahama Health Centre Development Company, will ultimately total $140m.

Disclosing that the Government has had to alter its financing strategy for the new hospital, Dr

Pointing out that it has not yet been determined if a government guarantee is required, Dr Darville said moving the new hospital forward is “in the best interests of the country” when it comes to healthcare and the well-being of the Bahamian people.

“There’s been a lot of appetite for it,” he said of the New Providence

Darville

20% OF GOV’TS FIXED COSTS GO TO DEBT BILL

forecast to hit $11.74bn. It is then projected to decline relatively slowly, and will still be above $11bn in the 2026-2027 fiscal year, with the Government relying on a growing economy to keep the debt-to-GDP ratio in check.

In the meantime, The Bahamas’ elevated debt levels and interest bill (debt servicing costs) will continue to suck much-needed taxpayer dollars and funding away from essential Bahamian public services such as health, education, social services and national security.

Hubert Edwards, the Organisation for Responsible Governance’s (ORG) economic development committee head, told Tribune Business it was a sign of “difficult current circumstances” when between 15-20 percent of a Budget’s recurrent spending is going to pay for debt servicing alone.

“It has to be concerning from the point of view that monies are going increasingly to pay for debt which could have been spent differently,” he added. “We have to analyse that payment. A portion of that payment remains locally on domestic debt. The concern we have is external debt keeps increasing. I think there has been an incremental increase in external debt, while domestic debt has been trending down.”

The Davis administration sought to convey the message that its fiscal consolidation plan is on track, and there is no cause for the domestic or international business/financing community to panic, during its Budget communication and post-Budget messaging.

However, Mr Edwards said it was clear from the 2023-2024 Budget numbers that “when you drill down, you get the impression that if not properly marshalled this could go very wrong, very quickly if the results don’t turn out as projected”.

Michael Halkitis, minister of economic affairs, addressing the Prime Minister’s Office’s media briefing last week, said projections of improved revenue and

“We’re closer. We’re months away from finalising the financing. We’ve had a couple of hits. It’s just a matter of making the determination of where we go to find funding.” Dr Darville said “a variety of different groups” have come to assess the feasibility plan and the Perpall Tract site, with the Government especially keen to tap available financing from multilateral lenders such as the InterAmerican Development Bank (IDB) because they offer lower interest rates and better terms.

Revealing that he is due to have discussions on the hospital’s financing with the UK High Commissioner later this week, Dr Darville told Tribune Business: “There’s money out there, but at the right interest rate. We did not get the interest rate we

deficit outcomes for the 2022-2023 fiscal year had “proven wrong” the Opposition and others who had argued the Government’s targets were too aggressive.

Simon Wilson, the Ministry of Finance’s financial secretary, last week said he was “pretty confident” the Government will slash the 2022-2023 fiscal deficit by $54.8m, or near-10 percent, compared to the last projection of $575.4m. “Unless something drastic happens to the revenue we should finish this year at over $100m above target,” he told Tribune Business.

“March was a very strong month. We have to wait and see on April’s numbers. June last year wasn’t as strong as we wanted it to be, so we have to keep our fingers crossed for June.” However, Mr Wilson added that there had been no sign of any easing in revenue trends heading into the last month of the fiscal year, which closes on June 30, 2023.

The Government’s Budget numbers predict that 2022-2023 revenues will come in some $107.8m above forecast, finishing the year at $2.909bn as opposed to $2.801bn, and thus setting it up to further cut the deficit next fiscal year on the path to achieving a fiscal surplus in 2024-2025.

Some $5.515m will be invested in the upcoming 2023-2024 fiscal year, joining the existing $2.654m outlay, with a further $8m and $27m injected in 2024-2025 and 2025-2026, respectively. In addition to these equity payments, the Ministry of Health and Wellness will also be investing $3.485m, $6m and $10.455m over the next three fiscal years respectively in the Grand Bahama facility’s construction.

Together, this year’s “equity” and construction payments total some $9m.

The 2022-2023 fiscal deficit is now projected to come in at $520.6m.

Mr Halkitis, meanwhile, took on assertions by the Opposition and others that the Davis administration is challenged with controlling its spending. He argued that next’s year Budget involves a “cut in spending” when inflation is taken into account, as total recurrent expenditure is forecast to rise by just $12m year-over-year.

“If you look at this Budget, this upcoming Budget next year, we anticipate spending to increase over this year’s level by $12m,” he argued. “So government spending is budgeted to increase by $12m, and let me put that in some context for you. For government spending in this fiscal year is anticipated to be $3.074bn, and next year $3.085bn.

“An increase of around $12m. That is less than one half of a one percent increase; it’s exactly a 0.4 percent increase, less than half of one percent. If you adjust it for inflation, it’s actually a cut in spending. Spending in this Budget is anticipated to increase by less than half of one percent.”

New hope

By CHRIS

The averted US debt default, and positive data from the American jobs market, put international investors in a buying mood. In Germany, the Dax index jumped over the 16,000 point mark last Friday. Wall Street also closed higher. The insolvency of the US government, which has finally been averted, has given the stock market a further boost. After the House of Representatives and the Senate approved a bill suspending the national debt ceiling in the US for the time being, job data also helped Wall Street get off to a positive end of the week. The approval of the US debt deal, and the latest US jobs data, make investors on Wall Street cautiously optimistic. The Dow Jones index was at 33,683 points at 1pm on Friday. The broader S&P 500 gained

1 percent to 4,278 points. The Nasdaq technology exchange index climbed 0.7 percent to 13,242 points. After the House of Representatives, the Senate on Thursday also approved legislation suspending the $31.4trn debt ceiling. A default by the US has thus been averted. In addition, the US unemployment rate rose to 3.7 percent in May from 3.4 percent in April. This fuelled new hopes that the US Federal Reserve will pause interest rate rises. The US economy continues to defy gravity, adding 339,000 jobs in May even after ten rate hikes in 14 months. Among the individual stocks, shares in Adidas and

Puma benefited from better-than-expected quarterly figures and a better outlook from US sporting goods retailer, Lululemon. Adidas rose by 3.4 percent as one of the favorites in the Dax, and Puma on the MDax by 4.2 percent.

In terms of US individual stocks, an increase in full-year guidance buoyed shares in yoga apparel maker, Lululemon. Its stock gained 15 percent. Shares in Nike also climbed by a good three percent. A better-than-analysts’ outlook also bolstered shares in chipmaker Broadcom, which rose 2.5 percent after a narrow pre-market loss. Oil prices edged up slightly in early trading on

Friday. In the morning, a barrel of Brent crude for delivery in August cost $74.63. That was 35 cents more than the day before.

The price of a barrel of West Texas Intermediate (WTI) for July delivery rose by 32 cents to $70.42.

There is tension in the crude oil market ahead of the Opec+ oil union

WALL STREET

meeting this weekend. Most experts expect the cartel’s funding policy to remain unchanged. But caution is advised. About two months ago, several OPEC countries had surprisingly reduced their production shortly before a similar meeting. Saudi Arabia has recently warned speculators

SMALL BUSINESS CENTRE IN FOUR-DAY WASHINGTON TRIP

A SMALL Business Development Centre (SBDC) delegation has undertaken a four-day mission to Washington D.C. in a bid to identify viable international opportunities and strategic relationships for Bahamian business owners.

Phyllice Bethel, the SBDC’s deputy interim executive director, led the delegation that attended the DC Chamber of Commerce 2023 Small Business Summit and held various meetings with entrepreneurial agencies and local government representatives.

She said: “We are simply continuing our mandate of equipping and empowering Bahamian MSMEs (micro, small and medium-sized enterprises) to maximise their full potential. In doing so, we want to provide the best opportunities, both local and international, for our clients and the wider business community at large.”

The mission was organised by the SBDC. In the months leading up to the trip, members of the delegation met with Alarice Grant, consul at the Bahamas embassy’s consular annex, and members of the DC Chamber of Commerce to discuss the formation of a strategic partnership,

joint programme opportunities and ways to connect Bahamian MSMEs with the entrepreneurial network in Washington D.C. and nearby states.

The trip included calls on Ambassador Wendall Jones, Ambassador Chet Neymour and the Organisation of American States (OAS), the Bahamas Embassy Consular Annex and the deputy mayor’s office of planning and economic development.

The mission’s itinerary also took the delegation on a tour of the Small Business Development Centre at Howard University, and the DC Chamber of Commerce, where discussions were held on training programmes, entrepreneurial apprenticeships and international exposure for

Bahamian entrepreneurs to the DC market via the 2024 Small Business Summit. The event concluded with a forum entitled ‘202 to 242’, hosted by The

Bahamas’ consular annex and the SBDC, to connect Bahamian entrepreneurs in the vicinity with each other, the SBDC and then diplomatic mission. It was also

designed to strengthen their network and provide additional support to expand their business.

Ambassador Jones pledged his support with championing the mission and mandate of the SBDC to provide Bahamians (both locally and internationally) with access to tools and entrepreneurial training as they become available.

The mission has led to a partnership between the SBDC and OAS, which allows Bahamian women entrepreneurs access to NASDAQs Milestone Circles, a 12-week mentorship initiative that enables small businesses to tackle their biggest challenges through access to a supportive network of mentors and resources that will help them grow and thrive.

Ms Bethel said that, with such a strong economy, large access to resources and investors and a diverse workforce, Washington D.C. is an ideal hub for Bahamian start-ups and existing business owners to forge partnerships with successful organisations, access their networks and build a sustainable entrepreneurial future.

not to bet on falling oil prices. But the capital market is split like never before between optimists versus pessimists. New records on the stock market and China’s reopening on one side, Ukraine war and still high inflation on the other side. Opportunities on both sides for the savvy investor.

SWEETING: CULTIVATION CENTRE TO OPEN BY END OF THE MONTH

FROM PAGE B2

“The government of The Bahamas has approved the investment of more than $15m towards the project and we will also see the construction of six grow houses in New Providence 38 in the Family Islands.”

The Golden Yolk project will be carried out on 12 Family Islands and is anticipated to create 90 jobs, more than half of which will be in the Family Islands.

The BAMSI Egg-cademy is also taking shape as over 3,800 birds are now housed in an “enriched cage system”. Mr Sweeting also said: “These birds will complement our egg production programme and is expected to produce an estimated one million eggs annually.”

He also said: “Currently, we produce 700,000 eggs per year and once the full programme is completed, we are looking at 28m and that can continue as we invest more. That’s 28m eggs nationally per year and for New Providence that would roughly be around 18m and the rest around the Family Islands.”

AMBASSADOR to the US.

Key tax arrears jump $230m to hit $1.13bn

of tax arrears owed to the Government on three of its largest and most vital revenue streams. These figures are fluid, and it is likely some outstanding debts will be paid down further.

For example, the end of March 2023 coincides with the annual deadline for Business Licence fee payments, so there is a reasonable chance that the $86.13m arrears shown will have been subsequently reduced. Yet some observers will point to the numbers as challenging the success of the Government’s efforts to aggressively target chronic delinquent taxpayers thus far, and especially the work of its Revenue Enhancement Unit.

The outstanding real property tax figures are also in line with those quoted recently by Michael Halkitis, minister of state for finance. The minister affirmed just prior to the Budget that some $822.168m outstanding real property taxes were believed to be past due and owing to the Public Treasury as at May 18, 2023, a figure not dissimilar to that detailed in the Budget documents. Of this sum, Mr Halkitis some $226m is owed by foreign property owners. A further $235m is due from commercial properties housing businesses or being used as rentals, and thus generating income. Some $155m is owned by

Bahamian homeowners living in owner-occupied properties.

Meanwhile, the Budget documents reveal that the Government is forecasting that it will forego some $318.449m in potential Excise Tax and Customs duty earnings in the first nine months of the 20232024 fiscal year. Projections for the nine months to endMarch 2024 project that it will give up some $159.225m in duties, and $127.567m in Excise Tax, under various investment incentive initiatives and programmes.

Of the $318.449m, some $100.492m - almost one-third - will be foregone under the Hotels Encouragement Act as the Government seeks to incentivise economic activity

in the country’s leading industry. Another $21.611m worth of concessions is forecast to be granted under the Cottage and Light Industries Manufacturing Act; $20.265m under the Family Island Development Encouragement Act; and $17.419m under the Industries Encouragement Act.

Albany, the high-end southwestern New Providence community whose lead developer is Joe Lewis’ Tavistock Group, is predicted to receive $16.859m in Customs and Excise tax exemptions during the first nine months of the 2023-2024 fiscal year to end-March 2024. Another $16.992m worth of concessions is to be granted

for clothing and footwear exemptions. Michael Halkitis, minister of economic affairs, speaking at the Prime Minister’s Office’s media briefing last week, conceded that getting The Bahamas’ back on its path to fiscal consolidation will not happen overnight.

“It is a multi-year project getting the fiscal house in order,” he asserted.

“In June 2021, the debtto-GDP ratio exceeded 100 percent. It’s now in the low 80 percents, and our goal is to get it back to 50 percent, in the region of 50 percent, by 2031. We are on track, but there is a lot of work left to be done to meet our targets.” The 50 percent debt-to-GDP target by 2031 was set under the former Minnis administration, and

Property tax cap up 25% to hit $150,000

FROM PAGE B1

or doubling from $60,000 to $120,000.

The move is consistent with the Davis administration’s Budget strategy of ensuring any tax or fee hikes fall on wealthy foreigners with the ability to pay, as they perceive it, rather than voting Bahamians. Most Bahamian homeowners and owneroccupied property will not be impacted in any way by this move as they fall under the $300,000 annual real property tax exemption threshold.

David Morley, Morley Realty’s principal, said of the $150,000 move: “That’s a lot of property tax to pay. I remember there was a lot of push back on that last year from those who live in high-end homes. I think everybody has to continue to pay property tax on a fair and equitable basis.

“I don’t know what $150,000 works out to on the value of a property. I’m assuming it’s going to catch 95-97 percent of all [owneroccupied] property. That’s a lot of property tax someone has to pay on an annual basis. That’s a pretty hefty property tax bill to pay. I cannot think what that represents and correlates to in terms of property value.”

George Damianos, Damianos Sotheby’s International Realty’s chief, told this newspaper that the $30,000 annual increase was not significant enough to “hurt the industry” or its international clients. “Personally, I think the biggest impact on the market was the first jump from $60,000 to $120,000,” he said.

“Any jump after that will only be affecting high-end

luxury homes. I would say that this is not a big jump that will definitely hurt the industry. If you’re talking about a man buying a $50m home he can definitely pay $150,000 in property taxes. I think they [the Government] should take a strong look under the Hotels Encouragement Act because a lot of people are skirting paying taxes and getting concessions for running homes like a hotel. There are houses under the Hotels Encouragement Act.”

Mario Carey, chairman and founder of Better Homes and Gardens MCR Bahamas, questioned whether empirical data supported the Government’s move and if it had consulted in advance with the Bahamas Real Estate Association (BREA) and its members.

“This is easy for them to do,” he added, questioning how many foreign home

owners will be caught byand are sensitive to - such a shift in taxation. Mr Carey questioned whether the growing tax burden will create “an interesting gap or divide” in the real estate market that drives high-end purchasers to acquire property in developments such as Albany which enjoy real property tax breaks and other investment incentives.

“The Government, by making these changes, is driving investors to buy in these developments. We’re on a dangerous slope,” he warned.

Christopher Armaly, a prominent broker and appraiser, who previously called for the annual $60,000 annual real property tax cap to be raised to around the level now being set by the Government, told this newspaper last year that “it’s about time, don’t you think, for multi-million properties” when it was increased to $120,000.

While that “only increases the tax for properties valued over $6m”, Mr Armaly said at the time: “It’s a start in the right direction. It certainly puts it [the threshold] a little more in line with the $100,000$120,000 a year area, which should be where it starts.”

He had previously told this newspaper that the former $60,000 annual real property tax cap resulted in middle class Bahamians

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was part of the initial Fiscal Responsibility Act passed in 2018.

“Next year, we project a Budget deficit of less than one percent and, just to put that into context, just two years ago our Budget deficit was over 13 percent [of GDP],” Mr Halkitis said. “So a Budget deficit of less than one percent next year, meaning that we anticipate by 2024-2025 to at least have a balanced budget.

“That would be a significant achievement coming out of the significant financial crisis that we took on when we came into this administration. Why is this important? Because the Government has to set the foundation for a stable economy.”

effectively paying a higher tax rate than persons with homes valued $10m and above.

All owner-occupied homes, meaning those residences used exclusively as dwellings by their owners, enjoy a tax break on the first $300,000 of their property’s valuation. A rate of 0.625 percent is applied to the next $250,000, and this increases to 1 percent for the remaining portion of the valuation above $500,000.

However, the $60,000 maximum limit on annual real property tax payments effectively left a $40m property owner’s tax rate at just 0.15 percent. That was four times’ below the rate applied to the $300,000$500,000 portion of a property’s worth. Raising the cap to $120,000 doubled this rate to 0.3 percent, which was still below that being levied on middle class Bahamians.

Applying the former $60,000 cap to properties valued at $30m, $20m and $10m resulted in effective tax rates of 0.2 percent; 0.3 percent; and 0.6 percent respectively. Those doubled as a result of last year’s increase to $120,000 to 0.4 percent; 0.6 percent; and 1.2 percent, with the latter two almost matching or exceeding the property tax rate paid on owner-occupied residences valued between $300,000 and $500,000.

“Should you and I pay the same rate as the mega wealthy?” Mr Armaly reiterated. “I’m not asking for the wealthy to be overtaxed. I’m asking for people like you and me to be taxed at the same rate.”

GEORGE DAMIANOS MARIO CAREY

META TESTS BLOCKING NEWS CONTENT ON INSTAGRAM, FACEBOOK FOR SOME CANADIANS

OTTAWA, Ontario

Associated Press

META is temporarily blocking some Canadian users from accessing news content on Facebook and Instagram as part of a temporary test that is expected to last through the end of June, the tech giant said Thursday.

The block — which follows a similar step taken by Google earlier this year — comes in response to a proposed bill that will require tech giants to pay publishers for linking to or otherwise repurposing their content online. Bill C-18, the Online News Act, is currently being considered

in the Senate and could be passed as early as this month.

Meta also said it is prepared to permanently block news content on Facebook and Instagram for Canadians if the bill passes.

Canadian Heritage Minister Pablo Rodriguez called Meta's move "disappointing" and said Canadians will not be intimidated by these tactics.

The temporary block announced Thursday will affect one to 5% of its 24 million Canadian users, with the number of those impacted fluctuating throughout the test, said Rachel Curran, head

of public policy for Meta Canada.

Randomly selected Canadian users will not be able to see or share news content in Canada either on Instagram or Facebook.

The block could include news links to articles, reels — which are short-form videos — or stories, which are photos and videos that disappear after 24 hours.

International news companies including the New York Times or BBC could also have their content blocked in Canada during the test if they are randomly selected.

Meta said it is picking random news publishers that will be notified that

some users in Canada will not be able to see or share their news content throughout the test. Users will still be able to access their accounts, pages, businesses suites and advertising.

Legacy media and broadcasters have praised the bill, which promises to "enhance fairness" in the digital news marketplace and help bring in more money for shrinking newsrooms. Tech giants including Meta and Google have been blamed in the past for disrupting and dominating the advertising industry, eclipsing smaller, traditional players.

Meta, which is based in Menlo Park, California, has taken similar steps in

FACEBOOK’s Meta logo sign is seen at the company headquarters in Menlo Park, Calif. on Oct. 28, 2021. Meta said Thursday, June 1, 2023 is prepared to block access to news content for some Canadians on Facebook and Instagram as part of a temporary test that is expected to last through the end of June.

the past. In 2021, it briefly blocked news from its platform in Australia after the country passed legislation that would compel tech

Photo:Tony Avelar/AP

companies to pay publishers for using their news stories. It later struck deals with Australian publishers.

MACY'S SLASHES EXPECTATIONS FOR THE YEAR AFTER A PULLBACK BY SHOPPERS IN THE SPRING

By ANNE D'INNOCENZIO

AP Retail Writer

MACY'S slashed its outlook for the entire year as sales weakened in the first quarter during an increasingly challenging economic environment, including stubbornly high inflation.

Sales began to flag in March, forcing the New York department store to cut prices on clothes and other discretionary items.

Macy's results wrap up the retail industry's fiscal first-quarter earnings season that showed how still high inflation, particularly in food, is forcing shoppers to further cut back on discretionary items like clothing to afford their larger grocery bills. Dollar General, which caters to low income shoppers, also cut its annual sales and profit outlook on Thursday as consumers turn more cautious.

Dollar General said it saw sales growth in groceries and other necessities, but that was offset by

declines in seasonal items, home, and apparel.

The economic challenges are starting to affect the wealthy, too.

Nordstrom on Wednesday reported a surprise profit in the first quarter despite an 11% sales decline, and said that its wealthy shoppers are becoming more restrained. That's forced the Seattlebased company to take a conservative approach to inventory.

"They're pretty resilient, but they're also cautious,"

Nordstrom CEO Erik Nordstrom told analysts during its earnings call.

Last week, Costco Wholesale Corp.'s Chief Financial Officer Richard Galanti noted that customers are trading down from beef to poultry and pork in recent months. The chain, which caters to high-income shoppers, noted that they are even switching to some canned food, like chicken and tuna.

Walmart, the nation's largest retailer, reported

surging sales earlier last month, and noted that it's seeing an influx of wealthier shoppers trade down to the discount chain in search of low prices in the grocery aisle.

Vivek Astvansh, an Indiana University marketing professor, noted the cumulative effect of high inflation and interest rates, which makes borrowing more expensive, is taking a toll on shoppers.

"There's this overall sense of hopeless, less confidence about the future," Astvansh said.

Macy's CEO Jeff Gennette told analysts on Thursday that sales started to weaken in late March and then worsen in April. Gennette cited coolerthan-normal temperatures that made spring clothing less appealing. He noted headlines surrounding the banking crisis starting in mid-March also worried shoppers and said the compounding effect of inflation has made shoppers divert more of their

money to food, essentials and services.

The decline was most pronounced at its Macy's stores, which has the largest exposure to the lower to middle income shopper with roughly 50% of its customers with average household income of $75,000 or under, Gennette said.

"Our customer became increasingly more deliberate in how they are allocating discretionary spend and buying closer to need," Gennette told analysts.

On the flip side, lessdiscretionary and less weather-dependent areas like fragrances, women's career sportswear and men's tailored items did well. He also noted a comeback in pandemic-related areas including housewares, which he believes is encouraging.

The company's luxury nameplates Bloomingdale's and beauty chain Bluemercury were also affected by the increasingly difficult

SHOPPERS walk into a Macy’s department store Monday, Feb. 22, 2021, at Miami International Mall in Doral, Fla. Macy’s reports their earnings on Thursday, June 1, 2023.

economic environment but not to the same intensity as Macy's, Gennette noted. Business improved slightly in May at Macy's stores, but sales enjoyed a more dramatic rebound at Bloomingdales, Gennette said. He noted during a phone interview with The Associated Press he wasn't sure the difference reflected a split of the higher income consumer versus the lower income shopper or different offerings in fashion.

"We haven't heard the answer to that yet, and we

need more time on that," he said.

Macy's Inc. reported net income of $155 million, or 56 cents per share, above the 45 cents Wall Street was looking for, but a significant decline from the $286 million earned during the same period last year. Sales fell to $5.17 billion from $5.56 billion in the first quarter last year, missing analyst projections. Comparable sales — sales coming from digital channels and stores opened at least a year — fell 7.2%

NOTICE is hereby given that AGNAU NOZY of Market Street, New Providence, Bahamas, is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 5th day of June, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

INTERNATIONAL BUSINESS COMPANIES ACT, 2000

MAPLE FALLS TRADING CORP. (IN VOLUNTARY LIQUIDATION)

NOTICE IS HEREBY GIVEN that in accordance with section 138(4) of the International Business Companies Act, 2000, as amended, MAPLE FALLS TRADING CORP. is in dissolution.

The dissolution of the said Company commenced on May 26, 2023 when the Articles of Dissolution were submitted to and registered with the Registrar General in Nassau, The Bahamas.

The sole liquidator of the said Company is Kim D Thompson of Equity Trust House, Caves Village, West Bay Street, P O Box N 10697, Nassau, Bahamas.

Kim D Thompson Sole Liquidator

Photo:Wilfredo Lee/AP

MONEY STORED IN VENMO AND OTHER PAYMENT APPS

COULD BE VULNERABLE, FINANCIAL WATCHDOG WARNS

By KEN SWEET AP Business Writer

CUSTOMERS of Venmo, PayPal and CashApp should not store their money with those apps for the long term because the funds might not be safe during a crisis, the Consumer Financial Protection Bureau warned Thursday.

The alert comes several weeks after the failure of Silicon Valley Bank, Signature Bank and First Republic Bank, which all experienced bank runs after fearful customers with uninsured deposits pulled their money en masse.

The Federal Deposit Insurance Corporation insures bank accounts up to $250,000. But money stored in Venmo or CashApp or Apple Cash is not being held in a traditional bank account. So, if there is an event similar to a bank run

Duties:

with those payment apps, those funds may not be protected.

Some of the funds may be eligible for pass-through insurance coverage if customers do certain activities with the apps, the CFPB said, but generally by default the apps are not covered by deposit insurance. For example, if a customer opened a PayPal Savings account, it would have deposit insurance through PayPal’s partner bank, Synchrony Bank. But the general PayPal account is not covered by insurance. For Apple Cash, which can be insured through Green Dot Bank, it requires a user to verify their identity to get deposit insurance.

“We find that stored funds can be at risk of loss in the event of financial distress or failure of the entity operating the nonbank payment platform, and often

are not placed in an account at a bank or credit union and lack individual deposit insurance coverage,” the CFPB said in its report.

“Consumers may not fully appreciate when, or under what conditions, they would be protected by deposit insurance,” the agency added in its report.

Peer-to-Peer payment apps and non-banks offering bank-like services have exploded in popularity in the last decade. Venmo now has more than 90 million customers and recently announced it was going to allow parents to create accounts for their teenage children, potentially bringing in tens of millions of new customers for the app. Apple recently announced a savings account tied to its Apple Card that is operated by Goldman Sachs. The savings account took in billions

• Handling a high volume of customer orders.

• Serving customer who sit in the bar with food and drinks.

• Taking orders & serving them to the right customers.

• Collecting payments from customers.

• Cleaning of the work area and the bar counter.

Interested persons can email us at jobopportunity-freeport@outlook.com

SUBJECT: (Barmaids)

THE VENMO app is displayed on an iPad on March 20, 2018, in Baltimore. Customers of Venmo, PayPal and CashApp should not store their money for the long term with these apps because their funds might not be safe during a financial crisis, the Consumer Financial Protection Bureau warned on Thursday, June 1, 2023.

of dollars in deposits within days of its launch. The Financial Technology Association, an industry group that represents PayPal as well as Cash App’s owner Block,

emphasized in a statement that those products are safe.

“Tens of millions of American consumers and small businesses rely on payment apps to better spend, manage, and

send their money. These accounts are safe and transparent, with users receiving FDIC Insurance on their accounts depending on the products they use,” the association said.

A VENDOR holds currency notes as he sells vegetables at a market place in Colombo, Sri Lanka, Thursday, June. 1, 2023. The Central Bank of Sri Lanka reduced its interest rates Thursday, June 1, 2023, for the first time since the island nation declared bankruptcy last year. Stern fiscal controls, improved foreign currency income and help from an International Monetary Fund program has resulted in inflation slowing faster than expected.

IMF SAYS SRI LANKA'S ECONOMIC RECOVERY SHOWS SIGNS OF IMPROVEMENT BUT CHALLENGES REMAIN

By BHARATHA MALLAWARACHI Associated Press

DEBT-stricken Sri Lanka, which declared bankruptcy last year, is showing signs of economic improvement but its recovery still faces challenges, the International Monetary Fund said Friday. The Indian Ocean island nation declared bankruptcy in April 2022 and said it was suspending repayment of its foreign debt. It reached an agreement with the IMF in

March on a nearly $3 billion bailout program over four years.

"Sri Lanka's economy is showing tentative signs of improvement, in part due to the implementation of critical policy actions. But the economic recovery remains challenging," said IMF deputy managing director Kenji Okamura after concluding a visit to Sri Lanka, where he met with the country's top leaders and officials.

Okamura said he welcomed Sri Lankan authorities' "strong commitment to implement their ambitious economic program, which is supported by the IMF."

IMF previously said Sri Lanka's economy is expected to resume growing in 2024 after contracting 3% this year. The expected economic growth of 1.5% next year hinges critically on the economic reforms Sri Lanka has agreed to undertake.

"Now, more than ever, it is essential to continue the reform momentum under strong ownership by both the authorities and the Sri Lankan people," Okamura said in a statement early Friday.

Sri Lanka's foreign debt exceeds $51 billion, of which $28 billion must be repaid by 2027. Sri Lanka has now started negotiations with its creditors on debt restructuring.

"The current economic crisis has its genesis in policy missteps aggravated by external shocks. We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability. I was encouraged by the authorities'

commitment to negotiate a debt strategy in a timely and transparent manner. Continued open dialogue with the creditors will help to reach restructuring agreements to restore debt sustainability in line with the program targets," Okamura said.

Sri Lanka's economic crisis and resultant shortages of essentials sparked riots last year, forcing then-President Gotabaya Rajapaksa to flee the country and later resign.

Unsustainable debt, a severe balance of payment crisis on top of lingering scars of the COVID-19 pandemic, along with the government's insistence on spending scarce foreign reserves to prop up the Sri Lankan rupee, led to a severe shortage of foreign currency and essentials such as fuel, medicine, cooking gas and food.

Although there are some signs of progress — with shortages reduced and dayto-day functions restored — under current President Ranil Wickremesinghe, the government is still struggling to find money to pay its employees and conduct other administrative functions.

There's been growing public dissatisfaction over the government's recent move to increase taxes and electricity bills that came as part of the commitment to obtain the bailout package from the IMF.

The government announced 6% cuts in the budgets of each ministry this year and plans to nearly halve the size of the military, which had swelled to more than 200,000 personnel due to a long civil war that ended in 2009.

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How Biden and McCarthy struck a debt limit deal and staved off a catastrophe

By SEUNG MIN KIM, STEPHEN GROVES AND FARNOUSH AMIRI Associated Press

IT WAS advice that Mitch McConnell had offered to Joe Biden once already: To resolve the debt limit standoff, he needed to strike a deal with House Speaker Kevin McCarthy — and McCarthy alone. But after the first meeting of the top four congressional leaders with the president in early May, the Senate minority leader felt the need to reemphasize his counsel.

After returning from the White House that day, McConnell called the president to privately urge him to “shrink the room” – meaning no direct involvement in the talks for himself, Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

That, McConnell stressed to Biden, was the only way to avert a potentially economy-rattling default.

A week later, Biden and McCarthy essentially adopted that path, tapping a handful of trusted emissaries to negotiate a deal that would lift the debt limit.

It was a turning point in an impasse that, until then, seemed intractable.

Having lived through the debacle of a 2011 debt limit fight, Biden would not entertain any concessions for a task that he viewed as Congress’ fundamental responsibility.

But McCarthy, prodded by conservatives insisting on sweeping changes to federal spending, was intent on using the nation’s borrowing authority as leverage even if it edged the U.S. closer to default.

The scramble that ensued showed how two of the most powerful figures in Washington — who share a belief in the power of personal relationships, despite not having much of one between themselves — jointly staved off an unprecedented default that could have ravaged the economy and held unknown political consequences. It’s a tale of an underestimated House speaker determined to defy expectations that he couldn’t address a complex debt limit fight, and a president who tuned out the noise from his own party to ensure a default would not happen on his watch.

But it was also a standoff largely instigated by Republicans who argued they needed to use the debt limit threat as a cudgel to rein in federal spending. And even with a resounding 314-117 House vote — followed by a 63-36 Senate vote — the episode is testing the durability of McCarthy’s speakership and his ability to tame a restive hard-right flank.

‘HOW YOU FINISH’

McCarthy, now emboldened, is unfazed. He reflected back on his election as speaker after the House passed the debt limit package, referring to his long battle to claim the gavel in January. “Every question you gave me (was), what could we survive, what could we even do? I told you then, it’s not how you start, it’s how you finish.”

This account of the weeks-long saga of how Washington defused the debt limit crisis is based on interviews with lawmakers, senior White House officials and top congressional aides,

some who requested anonymity to discuss details of private negotiations.

Perhaps most critical to clearing the blockades were Biden and McCarthy’s five negotiators who came to the discussions armed with policy gravitas and empowered by their principals. Particularly comforting to Republicans was the presence of presidential counselor Steve Ricchetti, who speaks on behalf of Biden like no one else, and Shalanda Young, now the director of the Office and Management and Budget, who cut her teeth as a beloved senior congressional aide managing the complex annual appropriations process.

Young and Rep. Patrick McHenry of North Carolina, one of McCarthy’s negotiators, grew so close that they checked in each morning by phone as they did their respective day care dropoffs. Meanwhile, she and the other GOP negotiator, Rep. Garret Graves, who represents the south central part of Louisiana where Young hails from, ribbed each other over who had the better gumbo recipe and squeezed in debt limit talks during a White House celebration for the national champion Louisiana State University women’s basketball team.

The five negotiators — Graves, McHenry, Ricchetti, Young and legislative affairs director Louisa Terrell — met daily in a stately office on the first floor of the Capitol, under frescoes painted by the 19th century muralist Constantino Brumidi. Inside, they would home in with seriousness on priorities and red lines to figure out how they could reach a deal.

THE PAUSE BUTTON AND A ‘REGRESSIVE’ OFFER

By May 19, the negotiations were getting shaky.

Republicans were losing patience as the White House didn’t appear to be budging on curbing federal spending. For the GOP, anything short of that was a nonstarter.

During a morning meeting that Friday, White House officials pushed McHenry and Graves to put a formal offer on the table, but by that point, the frustrated Republicans decided to take it all public.

Republicans told reporters the talks had momentarily stopped. Graves, in a ball cap and blue button-up shirt that looked more apt for a fishing trip than highstakes deal-making, said as he walked briskly through the Capitol: “We decided to press pause because it’s just not productive,” “We were not going to play games here,” Graves recounted later of his and McHenry’s frustrations.

The friction wasn’t about to ease. When the negotiations reconvened that night, McHenry and Graves put forward a fresh proposal to administration officials: It not only revived more of the rejected provisions in the GOP’s debt limit bill, but also included the House Republicans’ border-security bill for good measure.

One White House official called the offer “regressive.”

The White House went public with its own frustrations as the negotiations seemed to be going awry, first with a lengthy statement from communications

director Ben LaBolt and then from Biden himself at a news conference in Hiroshima, Japan, where he was attending a summit of the world’s leading democracies. “Now it’s time for the other side to move their extreme positions,” the president said. “Because much of what they’ve already proposed is simply, quite frankly, unacceptable.”

OPTIMISM, LATE NIGHTS AND GUMMY WORMS

Even as the public rhetoric sharpened, there were

signs that the talks were starting to take a better turn. As Biden left Japan, he called McCarthy from Air Force One, and the speaker emerged appearing more optimistic than he had in days. Sustained by coffee, gummy worms and burritos, the negotiators worked grueling hours, mostly at the Capitol but once at the Eisenhower Executive Office Building, where they noshed on Call Your Mother bagel sandwiches sent over by Jeff Zients, the White House chief of staff.

One session lasted until 2:30 a.m. Graves, at another time, showed reporters an app on his phone that tracked his sleep, which showed he was averaging three hours a night during the final stretch.

Still, McCarthy sent lawmakers home over the Memorial Day weekend, which McHenry said helped.

“The tone of the White House negotiators became much more serious and much more grounded in the realities they were going to have to accept,” McHenry said.

SELLING THE DEAL

By May 27, Biden and McCarthy announced a deal in principle, and now had to sell the agreement in earnest.

The night before the vote, McCarthy gathered House Republicans in the basement of the Capitol, wheeled in pizza and walked lawmakers through the bill, while daring the Freedom Caucus members to use the same confrontational language they used at a news conference earlier in the day. By the time the meeting ended, it was clear McCarthy had subdued the revolt.

Meanwhile, the White House had work of its own to mollify rank-and-file Democrats.

Biden and McCarthy were a study in contrasting styles.

The speaker chatted about the debt limit talks at every turn throughout the negotiations to frame the debate on his terms; the president stayed silent by design, leery of fouling anything up before the deal was finalized. Even as the deal was coming together, Biden had been privately trying to assuage his party’s concerns. After the Congressional Progressive Caucus publicly eviscerated the few details that they knew of, particularly about toughening requirements for federal safety-net programs, Rep. Pramila Jayapal, D-Wash., got a call that night. It was Biden. He assured her that his negotiators were working hard to minimize Republican-drafted changes to programs that offer food stamps and cash assistance. “I do believe that had we not done that, this would have been much worse than what I heard,” Jayapal said. After the deal was finalized, through phone calls and virtual briefings, White House officials answered questions, explained the agreement’s intricacies and fielded complaints from lawmakers about their communications strategy. As of Thursday, senior White House officials had called more than 130 lawmakers personally.

REP. GARRET GRAVES, R-La., flanked by House Republican Conference Chair Elise Stefanik, R-N.Y., and Speaker of the House Kevin McCarthy of Calif., speaks at a news conference after the House passed the debt ceiling bill at the Capitol in Washington, Wednesday, May 31, 2023. The bill now goes to the Senate.

Photo:Jose Luis Magana/AP

US HIRING JUMPED LAST MONTH. SO DID UNEMPLOYMENT. HERE’S WHAT THAT SAYS ABOUT THE ECONOMY

By CHRISTOPHER RUGABER

AP Economics Writer

THE NATION’S employers stepped up their hiring in May, adding a robust 339,000 jobs, well above expectations and evidence of enduring strength in an economy that the Federal Reserve is desperately trying to cool.

Friday’s report from the government reflected the job market’s resilience after more than a year of aggressive interest rate increases by the Fed. Many industries, from construction to restaurants to health care, are still adding jobs to keep up with consumer demand and restore their workforces to pre-pandemic levels.

Overall, the report painted a mostly encouraging picture of the job market. Yet there were some mixed messages in the May figures. Notably, the unemployment rate rose to 3.7%, from a five-decade low of 3.4% in April. It’s the highest unemployment rate since October. (The government compiles the unemployment data using

a different survey than the one used to calculate job gains, and the two surveys sometimes conflict.)

IS THE LABOR MARKET AS STRONG AS THE GAIN OF 339,000 JOBS SUGGESTS?

Probably not. In May, employers added the most jobs since January. So the overall picture is an encouraging one. Yet there are signs that hiring is cooling from the super-heated levels of the past two years. For one thing, the length of the average work week declined, to 34.3 hours from 34.4 in April. That is a seemingly small drop, but economists said it’s equivalent to cutting several hundred thousand jobs. It means that, on average, weekly paychecks will be slightly smaller. The average work week is down from 34.6 hours a year ago. Hourly wage growth also dipped in May, evidence that many businesses feel less pressure to dangle higher pay to find and keep workers. Average hourly pay increased 4.3% from a year earlier. That’s down

from gangbusters gains of nearly 6% a year ago.

And the rise in the unemployment rate partly reflected higher layoffs. This suggested that not everyone who lost jobs in recent high-profile layoffs by banks, tech firms and media companies has found new work.

IS THE ECONOMY HEADED FOR A RECESSION?

Not likely anytime soon. The strong, steady job growth of the past several months shows that the economy remains in solid shape despite the Fed’s interest rate hikes, which have made borrowing much costlier for businesses and consumers. A recession, if one occurs, is likely further away than many economists had previously thought.

“As long as the economy continues to produce above 200,000 jobs per month, this economy simply is not going to slip into recession,” said Joe Brusuelas, chief economist at consulting firm RSM.

More hiring translates into more Americans

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earning paychecks, a trend that suggests that consumer spending — the principal driver of U.S. economic growth — will keep growing.

DOES THAT MEAN THE ECONOMY IS IN THE CLEAR?

Not necessarily. Some cracks in the economy’s foundations have emerged. Home sales have tumbled. A measure of factory activity showed that manufacturing has contracted for seven straight months.

And consumers are showing signs of straining to keep up with higher prices. The proportion of Americans who are struggling to stay current on their credit card and auto loan debt rose in the first three months of this year, according to the Federal Reserve Bank of New York.

Sales at several retail companies, including discount chain Dollar General and department store Macy’s, have weakened. That indicates that lower-income consumers, in particular, are feeling squeezed by high inflation.

And the threat of further interest rate hikes by the Fed, in its continuing drive to fight inflation, always looms. The Fed’s rate increases have elevated the costs of mortgages, auto loans, credit card use and business borrowing.

The Fed has projected that its rate hikes will weaken the economy and raise unemployment, as well as lower inflation. Still, Chair Jerome Powell has

held out hope that the central bank can significantly slow price growth without causing a deep recession.

“The continued strength in employment pushes back the start of a prospective recession but does not eliminate that likelihood,” said Kathy Bostjancic, chief economist at Nationwide. “If the economy remains too hot to meaningfully slow inflation, the Fed will simply raise rates higher, still a path towards a downturn.”

WHAT DOES ALL THIS MEAN FOR THE FED’S APPROACH TO INTEREST RATES?

Top Fed officials signaled earlier this week that they plan to forgo a rate increase at their June 13-14 meeting. This would allow them time to assess how their previous rate hikes have affected the inflation pressures underlying the economy.

The Fed has increased its key rate by a substantial 5 percentage points since March 2022, to about 5.1%, the highest level in 16 years. Higher rates typically take time to affect job growth and inflation.

Some Fed officials might be unnerved by the burst of hiring in May and push for another rate hike this month. But many economists say last month’s rise in unemployment and slight decline in wage growth will likely be sufficient signs of a slowdown for the Fed to leave rates alone.

WHY DID THE UNEMPLOYMENT RATE RISE?

The government’s jobs report is derived from two separate surveys that are conducted each month. One survey covers businesses, the other households. The survey of businesses is used to calculate the job gain (or loss). The household survey, which asks people if they’ve done work for pay in the past month, determines the unemployment rate.

In May, the surveys diverged: Households reported an actual loss of jobs, while the survey of businesses found a sharp gain. Though the two surveys can diverge as they did for May, over time they generally produce similar results. The survey of businesses is larger and is generally regarded as more reliable, though the household survey often does a better job of capturing turning points in the economy.

One key reason for the divergence is that, according to the household survey, the number of selfemployed people fell by 369,000 from April to May. Self-employed workers are counted in the survey of households but not in the survey of businesses.

Drew Matus, chief economist at MetLife Investment Management, cautioned that the higher unemployment rate for May could signal weakness ahead. It suggests that companies are becoming more cautious about hiring.

Joblessness rose last month for teenagers, the disabled and people with less education, Matus noted. That was a sign that companies were cutting workers with fewer skills and less experience, a move that often precedes recessions.

“Before it was a rising tide lifts all boats, and now it seems like the boats have gotten smaller and firms are deciding who gets to sit in them,” Matus said.

WHO IS DOING THE HIRING?

The job gains in May were widespread across the economy. Companies in construction, shipping and warehousing, restaurants and hotels, government, health care and in such professions as engineering and architecture all added workers.

Many of those sectors have been struggling to restore their staffing to pre-pandemic levels. Restaurants, for example, are seeing strong demand yet still have fewer workers overall than they did before the pandemic.

One new worker, Mikala Slotnick, was hired as a barista last week by Red Bay Coffee and by Wednesday was working in their Berkeley, California, location. Slotnick, 21, has previously worked at large coffee chains but preferred Red Bay because it focuses on working directly with coffee growers overseas.

“It seems like they care more about what they’re producing, versus the money,” she said. “I think that’s just way better.”

WOMEN work in a restaurant kitchen in Chicago, Thursday, March 23, 2023. On Friday, the U.S. government issues the May jobs report. The labor market has added jobs at a steady clip in the past year, despite efforts by the Federal Reserve to cool the economy and bring down inflation.

Photo:Nam Y. Huh/AP

Here’s how to prepare to start paying back your student loans when the pandemic payment freeze ends

By CORA LEWIS AND ADRIANA MORGA Associated Press

A three-year pause on student loan payments will end this summer regardless of how the Supreme Court rules on the White House plan to forgive billions of dollars in student loan debt.

If Congress approves a debt ceiling deal negotiated by House Speaker Kevin McCarthy and President Joe Biden, payments will resume in late August, ending any lingering hope of a further extension of the pause that started during the COVID pandemic. Even if the deal falls through, payments will resume 60 days after the Supreme Court decision.

That ruling is expected sometime before the end of June. No matter what the justices decide, more than 40 million borrowers will have to start paying back their loans by the end of the summer at the latest.

Betsy Mayotte, President of the Institute of Student Loan Advisors, encourages people not to make any payments until the pause has ended. Instead, she says, put what you would have paid into a savings account.

"Then you've maintained the habit of making the payment, but (you're) earning a little bit of interest as well," she said. "There's no reason to send that money to the student loans until the last minute of the 0% interest rate."

Mayotte recommends borrowers use the loan-simulator tool at StudentAid. gov or the one on TISLA's website to find a payment plan that best fits their needs. The calculators tell you what your monthly payment would be under each available plan, as well as your long-term costs.

"I really want to emphasize the long-term," Mayotte said.

Sometimes, when borrowers are in a financial bind, they'll choose the option with the lowest monthly payment, which can cost more over the life of the loan, Mayotte said. Rather than "setting it and forgetting it," she encourages borrowers to reevaluate when their financial situation improves.

An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. It takes into account different expenses in your budget, and most federal student loans are eligible for at least one of these types of plans.

Generally, your payment amount under an incomedriven repayment plan is a percentage of your discretionary income. If your income is low enough, your payment could be as low as $0 per month. If you'd like to repay your federal student loans under an income-driven plan, the first step is to fill out an application through the Federal Student Aid website.

Fran Gonzales, 27, who is based in Texas, works as a supervisor for a financial institution. She holds $32,000 in public student loans and $40,000 in private student loans. During the payment pause on her public loans, Gonzales said she was able to pay off her credit card debt, buy a new car, and pay down two years' worth of private loans while saving money. Her private student loan payment has been $500 a month, and her public student loan payment will be $350 per month when it restarts.

Gonzales recommends that anyone with student loans speak with a mentor or financial advisor to educate themselves about their options, as well as making sure they're in an

income-driven repayment plan. The Federal Student Aid website can help direct you to counselors, as well as organizations like the Student Borrower Protection Center and the Institute of Student Loan Advisors.

"I was the first in my family to go to college, and I could have saved money with grants and scholarships had I known someone who knew about college," she said. "I could have gone to community college or lived in cheaper housing … It's a huge financial decision." Gonzales received her degree in business marketing and says she was

"horrible with finances" until she began working as a loan officer herself.

Gonzales's mother works in retail and her father for the airport, she said, and both encouraged her to pursue higher education. For her part, Gonzales now tries to inform others with student loans about what they're taking on and what their choices are.

"Anyone young I cross paths with, I try to educate them."

Yes — payment plans are always available. Even so, some advocates encourage borrowers to wait for now, since there's no financial penalty for nonpayment

during the pause on payments and interest accrual.

Katherine Welbeck of the Student Borrower Protection Center recommends logging on to your account and making sure you know the name of your servicer, your due date and whether you're enrolled in the best income-driven repayment plan.

If your budget doesn't allow you to resume payments, it's important to know how to navigate the possibility of default and delinquency on a student loan. Both can hurt your credit rating, which would make you ineligible for additional aid.

If you're in a short-term financial bind, according to Mayotte, you may qualify for deferment or forbearance — allowing you to temporarily suspend payment.

To determine whether deferment or forbearance are good options for you, you can contact your loan servicer. One thing to note: interest still accrues during deferment or forbearance. Both can also impact potential loan forgiveness options. Depending on the conditions of your deferment or forbearance, it may make sense to continue paying the interest during the payment suspension.

Saudi Arabia is slashing oil supply. It could mean higher gas prices for US drivers

By DAVID MCHUGH

AP Business Writer

SAUDI Arabia will reduce how much oil it sends to the global economy, taking a unilateral step to prop up the sagging price of crude after two previous cuts to supply by major producing countries in the OPEC+ alliance failed to push oil higher.

The Saudi cut of 1 million barrels per day, to start in July, comes as the other OPEC+ producers agreed in a meeting in Vienna to extend earlier production cuts through next year.

Calling the reduction a “lollipop,” Saudi Energy Minister Abdulaziz bin Salman said at a news conference that “we wanted to ice the cake.” He said the cut could be extended and that the group “will do whatever is necessary to bring stability to this market.”

The new cut would likely push up oil prices in the short term, but the impact after that would depend on whether Saudi Arabia decides to extend it, said Jorge Leon, senior vice president of oil markets research at Rystad Energy.

The move provides “a price floor because the Saudis can play with the

a

voluntary cut as much as they like,” he said.

The slump in oil prices has helped U.S. drivers fill their tanks more cheaply and gave consumers worldwide some relief from inflation.

“Gas is not going to become cheaper,” Leon

said. “If anything, it will become marginally more expensive.”

That the Saudis felt another cut was necessary underlines the uncertain outlook for demand for fuel in the months ahead. There are concerns about economic weakness in the U.S.

and Europe, while China’s rebound from COVID19 restrictions has been less robust than many had hoped.

Saudi Arabia, the dominant producer in the OPEC oil cartel, was one of several members that agreed on a surprise cut of 1.6

No breakthrough in NATO-Turkey talks about Sweden joining

ISTANBUL, TURKEY Associated Press

NATO Secretary-General Jens Stoltenberg made no breakthrough on Sunday in talks about Sweden's membership in the military organization with Turkish President Recep

Tayyip Erdogan, with officials from the two countries to meet in just over a week to try to bridge their differences.

NATO wants to bring Sweden into the fold by the time U.S. President Joe Biden and other allied leaders meet in Lithuania on

July 11-12, but Turkey and Hungary have yet to endorse the move. All 31 member countries must ratify a candidate's accession protocol for it to join the trans-Atlantic alliance. Turkey's government accuses Sweden of being too lenient on terror organizations and security

threats, including militant Kurdish groups and people associated with a 2016 coup attempt. Hungary has also delayed its approval, but the reasons why haven't been made publicly clear.

"President Erdogan and I agreed today that the permanent joint mechanism should

million barrels per day in April. The kingdom’s share was 500,000. That followed OPEC+ announcing in October that it would slash 2 million barrels per day, angering U.S. President Joe Biden by threatening higher gasoline prices a month before the midterm elections.

All told, OPEC+ has now dropped production on paper by 4.6 million barrels a day. But some countries can’t produce their quotas, so the actual reduction is around 3.5 million barrels per day, or over 3% of global supply.

The previous cuts gave little lasting boost to oil prices. International benchmark Brent crude climbed as high as $87 per barrel but has given up its post-cut gains and been loitering below $75 per barrel in recent days. U.S. crude has recently dipped below $70.

That has helped U.S. drivers kicking off the summer travel season, with prices at the pump averaging $3.55, down $1.02 from a year ago, according to auto club AAA. Falling energy prices also helped inflation in the 20 European countries that use the euro drop to the lowest level

meet again in the week starting on June 12. Membership will make Sweden safer, but also NATO and Turkey stronger," Stoltenberg told reporters in Istanbul.

The permanent joint mechanism was set up to address Turkey's concerns about Sweden and Finland, the latter of which became the 31st member of NATO in April. "Sweden has fulfilled its obligations," for membership, Stoltenberg said. He noted that the country has amended its constitution, strengthened its anti-terror laws, and lifted an arms

since before Russia invaded Ukraine.

The Saudis need sustained high oil revenue to fund ambitious development projects aimed at diversifying the country’s economy.

The International Monetary Fund estimates the kingdom needs $80.90 per barrel to meet its envisioned spending commitments, which include a planned $500 billion futuristic desert city project called Neom.

The U.S. recently replenished its Strategic Petroleum Reserve — after Biden announced the largest release from the national reserve in American history last year — in an indicator that U.S. officials may be less worried about OPEC cuts than in months past.

While oil producers like Saudi Arabia need revenue to fund their state budgets, they also have to take into account the impact of higher prices on oil-consuming countries.

Oil prices that go too high can fuel inflation, sapping consumer purchasing power and pushing central banks like the U.S. Federal Reserve toward further interest rate hikes that can slow economic growth.

embargo on Turkey since it applied to join NATO just over a year ago. Fearing they might be targeted by Moscow after Russia invaded Ukraine last year, Sweden and Finland abandoned their traditional positions of military nonalignment to seek protection under NATO's security umbrella. As Stoltenberg held talks in Istanbul, hundreds of people, including dozens of pro-Kurdish protesters, gathered in Stockholm to demonstrate against Sweden's planned NATO membership.

THE LOGO of the Organization of the Petroleoum Exporting Countries (OPEC) is seen outside of OPEC’s headquarters in Vienna, Austria, on March 3, 2022. Leading oil-producing countries led by Saudi Arabia and Russia are wrestling with whether to make another cut in crude supplies to the global economy as the OPEC+ alliance struggles to prop up sagging oil prices that have been

boon to U.S. drivers and helped ease inflation worldwide. The group is meeting Sunday, June 4, 2023 at OPEC headquarters in Vienna after sending mixed signals about possible moves.

Photo:Lisa Leutner/AP

WALL STREET LEAPS, NEARLY ESCAPES ITS BEAR MARKET AFTER STRONG JOBS REPORT

By STAN CHOE AP Business Writer

STOCKS rushed higher Friday after a strong report on the U.S. job market suggested a recession may not be as close as Wall Street had feared.

The S&P 500 leaped 1.5% for the latest surge in a rally that's vaulted it nearly 20% since midOctober. That put Wall Street's main measure of health on the edge of entering what's called a "bull market" despite a long list of challenges.

The Dow Jones Industrial Average rallied 701 points, or 2.1%, while the Nasdaq composite gained 1.1%.

The indexes got a boost after a report showed employers unexpectedly accelerated their hiring last month. It's the latest signal that the job market remains remarkably solid despite much higher interest rates, and it offers a hefty pillar of support for an economy that's begun to slow.

Areas of the market that do best when the economy is healthy led a widespread rally, including stocks of industrial companies, energy producers and banks. Exxon Mobil rose 2.3% as prices for crude oil climbed on hopes that a resilient economy would burn more fuel. Perhaps more importantly for markets, the Labor Department's monthly jobs report also showed a slowdown in increases for workers' pay even as hiring strengthened. While that may discourage workers trying to keep up with prices at the register, investors believe slower wage gains will mean less upward pressure on inflation across the economy. That in turn could allow the Federal Reserve to take it easier on its hikes to interest rates meant to lower inflation. High rates do that by slowing the economy and hurting investment prices, and they've already

caused pain for the banking and manufacturing industries.

The unemployment rate also rose by more than expected last month, moving up to 3.7% from a five-decade low. That implies a bit more slack in the job market and seems to conflict with the gangbusters hiring numbers, whose data comes from a separate survey.

"The reality is probably somewhere in between," said Brian Jacobsen, chief economist at Annex Wealth Management.

"One thing that is striking is that if you compare aggregate payrolls today to the pre-COVID trend, we still have more than a four million job hole to fillin," he said. "COVID led to strange times, a strange recovery and an even stranger slowdown."

Following the report, traders were largely expecting the Fed to hold interest rates steady at its next meeting in two weeks. If it does,

that would be the first time it hasn't hiked rates in more than a year. A pause on rate hikes would offer some breathing room for an economy that's already seen manufacturing contract sharply for months. Higher rates have also hurt many smaller and mid-sized banks, in part because customers have pulled deposits in search of higher interest at money-market funds.

Several high-profile bank failures since March have shaken the market, leading Wall Street to hunt for other possible weak links.

Several under the heaviest scrutiny rallied following the jobs report. PacWest Bancorp leaped 14.1%, for example, to trim its loss for the year to 66.6%.

But Fed officials have also warned recently that a pause on rate hikes in June wouldn't necessarily mean the end to hikes.

Traders are increasingly expecting the Fed to follow up a June pause with a July hike to interest rates, according to data from CME Group. That helped push Treasury yields higher.

THE WEATHER REPORT

The yield on the 10-year Treasury climbed to 3.69% from 3.60% late Thursday. It helps set rates for mortgages and other important loans.

The two-year Treasury yield, which moves more on expectations for Fed action, jumped to 4.50% from 4.34%.

Also helping to support Wall Street was the Senate giving final approval late Thursday to a deal that will allow the U.S. government to avoid a potentially disastrous default on its debt.

THE NYSE logo is displayed on the floor at the New York Stock Exchange in New York, Friday, June 2, 2023.

Photo:Seth Wenig/AP

TWITTER EXECUTIVE RESPONSIBLE FOR CONTENT SAFETY RESIGNS AFTER ELON MUSK CRITICISM

SAN FRANCISCO

Associated Press

A TOP Twitter executive responsible for safety and content moderation has left the company, her departure

coming soon after owner Elon Musk publicly complained about the platform’s handling of posts about transgender topics.

The departure pointed to a fresh wave of turmoil

among key officials at Twitter since Musk took over last year.

Ella Irwin, Twitter’s head of trust and safety, confirmed her resignation in a pair of tweets late Friday.

She did not say in the message why she was leaving, but her departure came shortly after Musk criticized Twitter’s handling of tweets about a conservative media company’s documentary

that questions transgender medical treatment for children and teens.

Musk was responding to complaints by Jeremy Boreing, co-CEO of the media company, the Daily Wire. Boreing said in tweets and retweets of conservative commentators Thursday that Twitter was suppressing the movie by flagging posts about it as hate speech and keeping the movie off lists of trending topics.

Boreing tweeted that Twitter canceled a deal to premiere “What is a Woman?” for free on the platform “because of two instances of ‘misgendering.’” Twitter rules prohibit intentionally referring to transgender individuals with the wrong gender or name.

“This was a mistake by many people at Twitter. It is definitely allowed,” Musk tweeted back. “Whether or not you agree with using someone’s preferred pronouns, not doing so is at most rude and certainly breaks no laws.”

Irwin tweeted Friday that “one or two people noticed” she left the company the day before, and she noted speculation about whether she was fired or quit. She teased that she would post 24 tweets to explain her departure.

Then she posted that she was just kidding about the long narrative.

“In all seriousness, I did resign but this has been a once in a lifetime experience and I’m so thankful to have worked with this amazing team of passionate, creative and hardworking people. Will be cheering you all and Twitter as you go!”

Next to Musk, Irwin had been the most prominent voice of the company’s ever-changing content policies in recent months.

Twitter has struggled to bring back advertisers turned off by Musk’s drastic changes and loosening of rules against hate speech since he bought Twitter for $44 billion in October.

Twitter also has an incoming CEO, Linda Yaccarino, known for decades of media and advertising industry experience, but she hasn’t started yet.

Irwin and Twitter didn’t respond to requests from The Associated Press for comment.

Twitter has been in turmoil including mass layoffs and voluntary departures since the billionaire Tesla owner bought the San Francisco company and took it private. The company’s head of trust and safety left shortly after the takeover, and turnover in the top ranks has continued.

TWITTER logos hang outside the company’s offices in San Francisco, Monday, Dec. 19, 2022. Ella Irwin, a top Twitter executive responsible for safety and content moderation, has left the company. Her departure came after owner Elon Musk publicly complained about the platform’s handling of posts about transgender topics.

Photo:Jeff Chiu/AP