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Maputo, Mozambique (IRIN) – Mozambique’s government will again attempt to curtail subsidy expenditures for essential foods and services, but this time its approach will be more nuanced so as to avoid a repeat of the cost-of-living protests in 2010.

Antonio Cruz, director of policy analysis in the planning ministry, recently told local media that subsidies on fuel, bread and rice, estimated to cost the donor-dependent government millions of dollars each month, would be phased out by the end of June.

At least 13 people died during widespread civil unrest in September 2010 in the capital, Maputo, after the government announced the immediate ending of all subsidies, which were subsequently reintroduced in the face of the protests.

Unsustainable subsidies

On 21 September 2010 the Mozambique news agency reported that registered bakers would receive a subsidy of 200 meticais (US$6.60) for every 50 kilogram bag of wheat flour – costing then 1,050 meticais ($37.75) – they purchased.

Other relief measures included halving water connection fees for low-consumption households – considerably reducing the cost of piped water to the poor – giving free electricity to households consuming 100kWh or less, and prepaid electricity consumers would no longer pay for refuse collection.

The subsidies had been introduced in 2008, ahead of the 2009 national elections. The government said they were required to mitigate the rising cost of living for the poor in the wake of the global financial crisis.

Economic analysts warned at the time that such blanket subsidies would be unsustainable, as the long-term global trend indicated rising food prices, although there would be fluctuations at the local level.

Improved prospects

“Prices of [Mozambique's] main staple, maize, declined markedly between March and April [2011] in all monitored markets, reflecting the start of the 2011 harvest,” said the Global Food Price Monitor, published on 5 May 2011 by the Food and Agricultural Organization (FAO).

“The sharpest decreases (between 29 and 33 percent) were recorded in the surplus northern provinces of Zambezia and Nampula. Prices are lower (between 12 and 18 percent) than in April last year [2010] due to satisfactory crop prospects,” the FAO noted.

However, the price of rice in Maputo, a staple food in the area, declined slightly in April from its almost record levels in March, but “remain 16 percent above the high levels seen a year ago [in 2010]“, the FAO said.

New subsidy model

Planning and development minister Aiuba Cuereneia told the state-run newspaper, Noticias, that savings accrued from discontinuing the generalized subsidies would enable the introduction of a new food basket and transport benefits for families earning less than two dollars a day.

The new subsidy system is expected to come into effect between June and August 2011 and the first phase of the scheme, which will take place between June and December, will focus on the urban poor.

The goods envisaged in the new basket include maize, flour, rice, fish, beans, groundnuts, vegetable oil and bread, and those eligible would be identified through a “census” based on income rather than wages. Bus passes would also be issued to workers, students and the elderly.

The census is being conducted in the country’s 11 provincial capitals, but according to a recent Survey of Household Budgets, the government estimates that 1.8 million people in urban areas have a monthly income below the threshold of 2,500 meticais ($82) and would be eligible to buy the food basket, which would cost 840 meticais ($28).

In February 2011 the government warned that the country’s food security needed to be “deeply improved” after 37 percent of households were found to be subsisting on one meal a day or less during the lean season – the three months leading up to the main harvest.

Diplomatic sources, who declined to be named, said the effects of global economic uncertainty had made Mozambique’s food security situation “more precarious”, as some donor countries and aid agencies were struggling to maintain the budgetary support they had provided in the past.

Donors also embarked on a “strike”, in which budget support was suspended between December 2009 and March 2010, demanding action on electoral reforms, corruption, and the often blurred line between the state and the ruling Frelimo party, among other things.

Citing Finance Minister Manuel Chang, Noticias reported in February 2011 the government was facing a $2 billion shortfall in this year’s budget, which was earmarked to be covered by donor support and international loans.

Rural adversity

However, due to the adverse affect of the global financial crisis and projected increases in food prices it is feared some of this support may not be provided.

“The rural people in Mozambique face many challenges when it comes to ensuring they have enough food to eat, not least because our country is incredibly prone to natural disasters that can devastate crops,” said Marcela Libombo, an official in the disaster management secretariat of the agriculture department.

“In the past, farmers have reported losing 30 to 40 percent of their crop, especially maize, because of an inability to get crops [from the north] to markets down south [to the main urban areas such as Maputo, which sources food from neighboring South Africa] and a lack of storage silos,” she told IRIN.

“But the reality is our northern provinces grow plenty of food. The main problems we have relate to storage and transport infrastructure.”

bc/go/he

– Provided by Integrated Regional Information Networks.

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Manila, Metro Manila, Philippines (AHN) – The Philippines registered a higher-than-expected 4.5 percent inflation rate for April on Thursday.

The 12-month high inflation rate prompted the Philippine Central Bank to increase the key lending rate by 25 basis points in a bid to contain inflationary pressure.

The last time the country logged a 4.5 percent inflation rate was in April 2010. For the first four months of 2011, the average inflation rate – triggered by higher prices in most commodity groups – was 4.2 percent, according to the National Statistics Office.

Following the higher inflation rate revelation, the Philippine Central Bank’s Monetary Board adjusted the benchmark lending rate to 4.5 percent, the second 25-basis points increase in two months approved by the board.

The board increased higher interest rates to discourage loans and slow down consumer spending, while encouraging savings.

The aim of the higher interest rate is to limit inflation this year and in 2012 to a range of 3 to 5 percent. Price increases were recorded in the following items:

• Fuel, light and water – 8.8 percent
• Services – 6.5 percent
• Clothing – 1.9 percent
• Housing and repairs – 2.2 percent, and
• Miscellaneous goods – 1.2 percent.

The March and April rate hikes end 20 consecutive months that the Monetary Board kept interest rates at historic low levels since July 2009 to counter the negative impact of the global economic crisis on the country.

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Washington, DC, United States (KaiserHealth) – In past years, a student’s graduation could mean leaving behind not only the classroom but also health insurance coverage, since family plans often stopped covering dependent children once they left school.

The health-care overhaul has changed that: Adult children can now remain on their parents’ plan until age 26, with few exceptions. (More on that later.) But even if coverage under a family plan isn’t an option, the new law has helped ensure that some of the other choices available to young adults offer better protection than they have in the past.

For many graduates, staying on their parents’ plan is likely to be the best option. “Most employer plans have good benefit packages,” says Sara Collins, a vice president at the Commonwealth Fund, a private organization that studies health-care issues. Keeping an adult child on the family policy probably won’t significantly affect the premium, his or her existing conditions continue to be covered and the new graduate can keep using the same doctors.

Rochelle O’Sullivan is relieved that she can stay on her mother’s plan after she graduates from Boston University this spring. The 22-year-old is on crutches after breaking her hip when she slipped at the airport on her way home to San Francisco for spring break in March. Having health insurance while she mends is critical. But once she kicks her job search into high gear, O’Sullivan doesn’t want health insurance concerns to get in the way.

“I’m worried about getting a job, getting experience,” says the mass communications major. “And if that means taking a job without insurance, I’d do that.”

The law applies to adult children whether or not they live at home or are financially independent. Even married children can stay on their parents’ health policy until age 26.

The biggest wrinkle for young adults: If they take a job whose benefits include health insurance, they can’t choose to stay on their parents’ plan.

If that job offers good coverage, that’s not a problem. But new grads often take entry-level or part-time jobs, which can come with limited-benefit plans that offer low coverage limits providing little protection if they actually get sick. According to the Department of Health and Human Services, however, even inadequate, so-called “mini-med” policies count as insurance, and if young adults are offered such coverage, they can’t be covered under their parents’ plans. Once the health-care law is fully implemented in 2014, mini-med plans will be phased out.

The Bryant family has been negotiating this tricky period. Kelli and Kirk Bryant’s oldest son, Dylan, 21, graduated last September and was working part time at a retailer while looking for a full-time job. The retailer offers a limited-benefit policy with $50,000 in coverage annually, not nearly as good as the comprehensive plan the family has through Kirk’s job at a hospital in Lincoln, Neb.

The retailer said Dylan wasn’t eligible for its insurance, but Kelli was worried that that was a mistake and that he might be on thin ice if questions arose.

That’s no longer a concern. Recently Dylan took a new part-time job as a security specialist at a mental health facility. The new job doesn’t offer health insurance, leaving no doubt that Dylan is free to be covered under the family plan. Ironically, being offered a job without health insurance is, in this instance, a good thing, says Kelli, who says she has contacted one of her U.S. senators about tightening up the definition of on-the-job insurance for young adults.

Of course, many adult children don’t have access to a family health plan. Their parents may not have coverage on the job. Or if the parents are on Medicare or are part of a retiree-only health plan through a previous employer, the new provisions extending coverage up to age 26 don’t apply. But there are other options for young adults.

If they’re healthy, an individual insurance policy may be a reasonable choice. Although coverage is often not as comprehensive as it is with a group plan, individual policies can no longer impose lifetime coverage limits or, in most cases, annual limits, and they must provide a range of preventive services for free. Premiums for young, healthy people may be very affordable, say experts.

Uninsured young people with preexisting medical conditions can consider special state-based insurance plans created under the health-care law. But they can be pricey, and you have to have been uninsured for six months to qualify.

Although the family policy is likely to be the best option, high school graduates going on to college should consider their college’s health plans, say experts. Some are good plans, and recent proposed regulations would require many of them to be classified as individual health insurance plans, with similar protections and standards. That should result in many of the worst student plans shutting down, says Stephen Beckley, a health-care management consultant for colleges and universities in Fort Collins, Colo. “We expect many plans to drop off between 2012 and 2014,” he says.

Still wondering what to do? Young Invincibles, a health-care advocacy group for young adults, has developed a toolkit to help grads assess the options.

“When you graduate, you get an exit interview to discuss your student loans,” says Aaron Smith, the organization’s co-founder and executive director. “There’s nothing like that for health insurance.”

– Provided by Kaiser Health News.

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MOMBASA, Kenya (IRIN) – When police in Kenya’s coastal tourist city of Mombasa conduct night raids, it is not unusual for a large number of sex workers arrested to be under 18.

The government faces a struggle to end a trade that many young girls see as a fast way out of poverty and into a more glamorous life.

Munirah* spends her days looking for customers at the city’s Kenyatta Public Beach. Just 15, she already has one child and is the sole breadwinner for her household.

“My widowed mother lost both her hands while working at a steel processing factory in Mombasa, forcing me to do what I am doing,” she told IRIN/PlusNews.

Munirah says she has been selling sex for six months and has already slept with several men, mainly tourists. Most of her clients prefer sex without a condom. When asked if she was aware of the risks of HIV, she shrugged and admitted she had never been for an HIV test.

According to Grace Odembo, a field coordinator with the NGO, Solidarity with Women in Distress, SOLWODI, many of the girls on the streets have limited formal education and therefore little chance of gainful legal employment.

She said “beach boys” – young men who hang around the beaches – acted as pimps for tourists seeking young girls and were paid handsome commissions, fuelling the cycle of child sex work.

“This large number of small girls you see loitering along the beaches looking for wazungu [white men] and even those engaging in legitimate businesses such as selling curios… they fall prey to beach boys who [tell] them they’ll be introduced to perfect rich suitors, only to have them end up in the arms of sex pests instead,” Odembo said.

According to a 2006 study by the government and the UN Children’s Fund, as many as 30 percent of teenage girls in the coastal towns of Diani, Kilifi, Malindi and Mombasa were involved in casual sex work. More than 10 percent of girls began transactional sex before the age of 12.

The study also found that 35.5 percent of all sex acts involving children and tourists took place without condoms.

In 2004, Kenya introduced the “Code of Conduct for the Protection of Children Against Sexual Exploitation in Travel and Tourism” to create awareness and prevent commercial sexual exploitation of children. However, the code seems to have done little to deter tourists seeking sex with minors.

Members of Kenya’s tourism sector say poverty is the main reason young girls turn to sex work, and why it is so difficult to fight the phenomenon.

“The parents, most of whom happen to be poor, instead encourage their daughters [to sell sex] so as to supplement their family earnings,” said Titus Kangangi, chairman of the Kenya Association of Hoteliers. “In many cases, a guardian sides with the accused whenever sexual abuse charges are brought.”

Out of court settlements are the norm in such cases, with tourists paying off families of young girls to avoid jail terms.

Action needed

Tourism Minister Najib Balala told IRIN/PlusNews it was important to rid the coast of its reputation of a haven for child sex tourism.

“This embarrassing tag must be dealt with right from the community level; it is a cartel that needs so much attention if we have to win,” he said. “It has cost the region and country credible tourists and investors, who now see the country as a sex destination.”

Balala said the government was putting more effort into adhering to the code of conduct by cancelling the business licences of establishments allowing tourists to check in with underage girls.

SOLWODI counsels young women and offers alternative incomes through microfinance loans. However, its resources are limited and for many girls, the small loans from NGOs are no match for the income they earn from wealthy tourists.

Poverty is key

Odembo said the government needed to be more vigilant in keeping young girls off the streets. “The government needs to come up with enough rescue centres within the region,” she said. “They should also get to the bottom of why a child found loitering in the beach isn’t attending school.”

According to James Weru, programmes director for the NGO, African Pro-poor Tourism Development Centre , tackling poverty is key to ending child sex tourism.

“Tourism is one of Kenya’s biggest income earners, but less than 20 percent of this income trickles down to local economies and as a result, locals remain very poor,” he said. “The government needs to spread the income out to benefit the locals so that there is less temptation to go into sex work.”

He noted that it would also be important to enforce adherence to the code of conduct and to back this up with serious legal consequences for defaulters.

“We also need to carry out education for tourists and ensure that we are getting the right kind of tourists,” Weru added. “Many governments have lists of paedophiles who are blacklisted from entering their countries, but we have no such measures in Kenya.”

jk/kr/mw

*Only one name used to protect the child’s identity

– Provided by Integrated Regional Information Networks.

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Los Angeles, CA, United States (AHN Entertainment) – Usher’s “OMG Tour” is set to kick off its second leg next week and he’s getting even more star-studded support. Along with previously-announced Akon, Dev and the Cataracs are set to join the “More” singer on tour.

After contributing to the Far*East Movement hit “Like a G6,” Dev and production duo the Cataracs, have started to build buzz with their own singles, including Dev’s “Booty Bounce,” “Bass Down Low,” and her new single, “In the Dark.”

The Cataracs, who produced Snoop Dogg’s hit new single “Sweat,” have also collaborated with Dev on their new single “Top of the World” and “Sunrise,” as well as their Top 40 hit for New Boyz, “Backseat.”

Dev and the Cataracs are set to join the tour for 17 dates beginning April 28 in Orlando, FL, and wrapping up May 29 in San Jose, CA. The Cataracs will perform sans Dev on April 30 in Charlotte, NC, and May 7 in Newark, NJ.

The second leg of Usher’s hot-selling tour actually kicks off one day earlier in Ft. Lauderdale, FL, on April 27, but Dev and the Cataracs won’t appear. They’ll also be missing in action for the June 1 Los Angeles date.

“The Cataracs and I have a really cool live performance set up, and a lot of our songs are featuring each other, so it works out really well. It’ll be 20 minutes of hotness,” 21-year-old Dev told Billboard.

Usher “OMG Tour” with Akon and special guests Dev and the Cataracs

2011 Tour Dates

• 

April 28: Orlando, FL (Amway Center)

• April 30: Charlotte, NC (Time Warner Cable Arena)

• May 1: Columbia, SC (Colonial Life Arena)

• May 4: Providence, RI (Dunkin Donuts Center)
• 
May 6: Atlantic City, NJ (Atlantic City Boardwalk Hall)

• May 7: Newark, NJ (Prudential Center)

• May 8: Uniondale, NY (Nassau Veterans Memorial Coliseum)

• May 11: Pittsburgh, PA (Consol Energy Center)
• 
May 12: Cleveland, OH (Quicken Loans Arena)

• May 14: Toronto, Ont. (Air Canada Centre)

• May 15: Auburn Hills, MI (The Palace of Auburn Hills)

• May 18: Columbus, OH (Schottenstein Center)

• May 20: Rosemont, IL (Allstate Arena)

• May 21: Minneapolis, MN (Target Center)
• 
May 22: Omaha, NE (Qwest Center)
• 
May 25: Vancouver, B.C. (Rogers Arena)

• May 26: Portland, Oreg. (Rose Garden Arena)

• May 28: Sacramento, Calif. (Power Balance Pavilion)

• May 29: San Jose, CA (HP Pavilion At San Jose)

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DHAKA, Bangladesh (IRIN) – Lack of regulation and a surplus of donor funds in Bangladesh’s microcredit industry have led to NGOs pushing loans to over-indebted borrowers, says BRAC, the world’s largest development organization and heavily involved in the country’s microfinance industry.

Asked whether BRAC itself had pushed loans onto borrowers who could not afford them, Shameran Abed, programme head of microfinance at BRAC, told IRIN: “Yes,” citing “excess liquidity” and a lack of communication between lenders.

“In the mid 2000s, the microfinancing industry grew too fast. And yes, we did,” said Abed. “But I’ll tell you why we did – we didn’t have perfect information.”

In 2009, BRAC disbursed US$1.1 billion worth of loans to women throughout Bangladesh, and like many other microfinance institutions (MFIs), claimed that 99 percent of their borrowers paid back their loans, a win-win situation.

However, the industry has also come into disrepute. A Norwegian documentary, Caught in Micro Debt, sparked international outrage in 2010 by showing the difficulties people have under the burden of paying back a loan.

Some borrowers are even taking out more loans to meet repayments, experts say.

Microcredit, the practice of loaning sums as small as US$20, was first pioneered in Bangladesh in the 70s and 80s by Nobel laureate and politically controversial figure Mohammad Yunus and the organization he founded, Grameen Bank.

Since then, the industry has mushroomed to over 500 registered MFIs in Bangladesh and has come under increasing scrutiny.

Women, who are the borrowers in most cases, are subject to high interest rates and aggressive debt recovery techniques, said Lamia Karim, associate professor of anthropology at the University of Oregon. She has been researching microfinance for more than 15 years.

But BRAC’s Abed said the popular belief that high interest rates are to blame for loan defaulting is wrong. The interest on a $140 loan, he explained, is 15 percent, with weekly installments of $3.40, of which about $0.40 is interest.

“Is that 30 taka [US $0.40] tipping you over the edge? I don’t think so,” he said.

Inadequate regulatory body

Despite having more than 20 million micro-borrowers, the Bangladesh government still has no effective system in place to protect microcredit lenders and clients, experts agree.

The Microcredit Regulatory Authority (MRA), formed in 2006 after repetitive calls from the microcredit industry to establish control over smaller MFIs, is hamstrung by a lack of manpower and funds, according Prodip Chandra Roy, MRA assistant director of research.

Furthermore, Roy said the MRA’s authority is severely undermined by other organizations that offer registration.

“For us the biggest challenge is to control other authorities that also have the authority to register microfinance organizations,” he said.

To register with the MRA, an MFI has to show either that it has 1,000 members (potential borrowers), or $50,000-worth of dispersible funds. To date, the MRA has registered some 548 MFIs out of thousands operating in Bangladesh.

Strong-arm tactics

Many microcredit borrowers have little or no property to be used as collateral, which makes trust a key element of the loaning process.

“For our microfinance borrowers we do not have any collateral, so we cannot take anything back. The court system doesn’t work here. So, the only way you can get your money back is to keep pestering them,” Abed said.

However, BRAC, Grameen and other NGOs have been found to do much more than pester borrowers who missed payments, some claims suggest.

As an attack on a family’s honour, women are regularly shamed in public, an activity that can have grave social repercussions, Karim said.

Stronger measures are used if the borrowers default even after public humiliation.

“Grameen, BRAC, ASA and Proshika all strong-armed women into paying back. In extreme cases homesteads are taken apart and the timber and tin sold off,” said Karim.

Though the NGOs don’t actively take part in `ghar bhanga’ (house-breaking), community members do what NGO officers order them to do, out of fear of losing access to loans, she said.

However, despite numerous papers by independent researchers, the NGO community refuses to accept such allegations.

“I’ve not had one issue of complaints [of house-breaking] coming from borrowers, or the media or the society that we work in,” said Abed.

mh/nb/ds/cb

– Provided by Integrated Regional Information Networks.

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Trollhattan, Sweden (AHN) – Beleaguered automaker Saab has requested changes to guarantees from Swedish authorities, the latest effort by the beleaguered automaker to resolve financial issues.

Saab has asked Sweden’s National Debt Office to approve an agreement reducing state credit guarantees for loans from the European Investment Bank, according to Swedish media. The company, which Dutch automaker Spyker Cars bought from General Motors last year, is seeking a foreign investor to help it with an infusion of cash.

Swedish Finance Minister Anders Borg told SVT on Thursday that Saab is seeking to resolve its liquidity issues with difficult solutions. He added that the company had to show the government taxpayers would not in end bear the brunt of the problem.

Production at Saab’s facilty in Trollhattan remains suspended. Suppliers stopped delivering parts early thie month, forcing the company to halt production. A few days of resumption ended in another production stoppage despite assurances from the Victor Muller, chief executive of Spyker and chairman of Saab, that the situaiton was a “small glitch.”

Russian banker Vladimir Antonov, a former Spyker chairman who acquired the automaker’s luxury brand unit in February, is said to have asked Swedish authorities approval to buy Saab real eastate in Trollhattan.

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Washington, D.C., United States (AHN) – The Department of Defense is trying to find a solution for fallen service members as families of service members killed in the line of duty during a government shutdown would not be paid death benefits, according to a senior defense official.

Speaking to the Pentagon journalists on Friday the senior defense official said, “When it finally gets down to it we can’t disperse the money,” adding “It’s just not legal.”

The Pentagon is trying to work with the military aid organizations to provide loans which could later be reimbursed by the government but the senior defense officials said, “We don’t have all that nailed down (yet).”

According to the Pentagon rules, the families of a fallen soldier receive about $100,000 payment within days of such a military death and there are pay outs for roughly 100 to 150 deaths benefits a month.

Compared to 1995 shutdown when the DoD was affected for only five days, the defense department senior official admitted that the effects of a looming government shutdown would be “harsh and unfair” on all DoD personnel.

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Dallas, TX, United States (AHN) – According to the latest data, a 37 percent year-over-year decline in bank failures has resulted in the number of mortgage-related operations to close or fail during the first quarter.

However despite the subdued banking activity, the reverse mortgage sector continued to be pummeled.

During the first three months of 2011, a total of 37 mortgage-related firms or departments either failed or were closed down by management, based on an analysis by MortgageDaily.com.

Analysts said the drop is a result of a slowdown in the number of bank failures. As of the end of March, just 26 bank failures had been reported by the Federal Deposit Insurance Corp.

However, at the end of the first quarter last year 41 federally insured banks had already failed.

The latest quarter also saw fewer failed banks than the 30 in the final quarter of 2010.

Within the latest quarter, three banks failed in March however 23 banks failed between January and February.

“One sector that saw the exit of high-profile players was reverse mortgage lending,” said Sam Garcia, founder and publisher of Mortgage Daily.

He went on to say, “During the first quarter, Bank of America Home Loans disclosed plans to abandon reverse mortgage lending, Financial Freedom’s parent OneWest Bank Group LLC said it decided to pull the plug on reverse lending, and Wells Fargo Home Mortgage announced it would eliminate its wholesale reverse mortgage channel.”

During fiscal 2010, only 96,971 home-equity conversion mortgages were endorsed by the Federal Housing Administration, falling from the previous year’s 162,619.

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Shanghai, China (AHN) – Profitable lending made possible by fast economic growth in China helped boost net profit 28 percent at Industrial & Commercial Bank of China Ltd (ICBC), the world’s largest lender by market value.

ICBC (1398.HK) is also China’s largest bank by assets.

That translated to $25.19 billion in net profit for the 12 month period ending Dec. 31, which was better than had been expected.

In addition, net interest income was up by 24 percent.

However, ICBC officials do not expect the pace of lending to keep up because government officials have asked banks to cut back on expansion of loans.

Bank officials expect only a 13.2 percent growth in loans during 2011 compared to a 19 percent expansion rate in 2010 and 25 percent in 2009.

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