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ADB to Improve Skills, Competitiveness of Cambodia’s Labor Force

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The Asian Development Bank (ADB) has approved a $60 million loan to boost the skills and competitiveness of Cambodia’s growing labor force, as the Government of Cambodia seeks to transition its economy from a low-skilled, labor-intensive growth model to a skills-driven one.

The loan aims to help Cambodia diversify and modernize its industrial sector by upgrading the facilities and equipment of selected technical training institutes (TTIs) around the country; improving the curriculum and skills of TTI trainers; and forging stronger ties between the government and business community to meet the changing needs of the labor market.

Cambodia is ranked 110th out of 140 economies in the 2018 Global Competitiveness Report owing to the difficulty faced by businesses in finding skilled employees to fill technical roles. The country’s technical and vocational education and training (TVET) programs are not meeting the needs of the labor market, with most diploma programs focusing on jobs in the service sector.

“Having a highly skilled labor force is essential for a country like Cambodia, which has a fast-growing economy and an expanding workforce,” said ADB Education Specialist for Southeast Asia Ms. Yumiko Yamakawa. “The ADB loan will focus on improving the skills of workers employed in high-growth sectors to fuel the country’s development. We are also making sure that all stakeholders, especially the government and the private sector, work together to boost workers’ skills.”

The Skills for Competitiveness Project will help train 18,000 qualified technicians (28% women), with higher employability and technical skills in four priority sectors: manufacturing, construction, electricity, and electronics. This will be done by strengthening five TTIs around Cambodia, including the upgrading of 16 new training facilities with gender-sensitive, inclusive, and energy-saving design features like separate dormitory floors and toilets for women; providing advanced and industry-grade training equipment; building capacity of trainers; and providing merit-based stipends to selected students.

The five TTIs identified for the project are the Battambang Institute of Technology, the Institute of Technology of Cambodia, the National Polytechnic Institute of Angkor, the National Technical Training Institute for TVET Park, and the Regional Polytechnic Institute Techo Sen Svay Rieng.

Furthermore, the project will provide upskilling and reskilling opportunities for existing workers to address skills gaps and skills shortage in the industrial sector through work-based learning programs. Eighteen work-based lending programs will be implemented in partnership with industry players, which will improve the competencies of about 360 workers.

The pilot skills development fund, an innovative model to increase and incentivize industry investments in skills development in Cambodia, will be expanded. The project will finance training proposals to be supported by the fund. This will provide training opportunities for at least 3,500 workers (25% women); develop the capacity of government agencies to strengthen the management of the fund; and provide support for establishing a new permanent agency, which will be fully operational by 2024.

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Finance

U.S. bank trouble heralds The End of dollar Reserve system

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The US banking system is broken, stresses ‘The Asia Times’. That doesn’t portend more high-profile failures like Credit Suisse. The central banks will keep moribund institutions on life support.

But the era of dollar-based reserves and floating exchange rates that began on August 15, 1971, when the US severed the link between the dollar and gold, is coming to an end. The pain will be transferred from the banks to the real economy, which will starve for credit.

And the geopolitical consequences will be enormous. The seize-up of dollar credit will accelerate the shift to a multipolar reserve system, with advantage to China’s yuan as a competitor to the dollar.

Gold, the “barbarous relic” abhorred by John Maynard Keynes, will play a bigger role because the dollar banking system is dysfunctional, and no other currency — surely not the tightly-controlled yuan — can replace it. Now at an all-time record price of US$2,000 an ounce, gold is likely to rise further.

The greatest danger to dollar hegemony and the strategic power that it imparts to Washington is not China’s ambition to expand the international role of the yuan.

This crisis is utterly unlike 2008, when banks levered up trillions of dollars of dodgy assets based on “liar’s loans” to homeowners. Fifteen years ago, the credit quality of the banking system was rotten and leverage was out of control. Bank credit quality today is the best in a generation. The crisis stems from the now-impossible task of financing America’s ever-expanding foreign debt.

America’s chronic current account deficits of the past 30 years amount to an exchange of goods for paper: America buys more goods than it sells, and sells assets (stocks, bonds, real estate, and so on) to foreigners to make up the difference.

America now owes a net $18 trillion to foreigners, roughly equal to the cumulative sum of these deficits over 30 years. The trouble is that the foreigners who own US assets receive cash flows in dollars, but need to spend money in their own currencies.

Before 1971, when central banks maintained exchange rates at a fixed level and the United States covered its relatively small current account deficit by transferring gold to foreign central banks at a fixed price of $35 an ounce, none of this was necessary.

The end of the gold link to the dollar and the new regime of floating exchange rates allowed the United States to run massive current account deficits by selling its assets to the world.

In effect, the market worries that buying inflation protection from the US government is like passengers on the Titanic buying shipwreck insurance from the captain. The gold market is too big and diverse to manipulate.

The dollar reserve system will go out not with a bang, but a whimper. The central banks will step in to prevent any dramatic failures. But bank balance sheets will shrink, credit to the real economy will diminish and international lending in particular will evaporate.

Southeast Asia will rely more on its own currencies and the yuan. The dollar frog will boil by slow increments.

It’s fortuitous that Western sanctions on Russia during the past year prompted China, Russia, India and the Persian Gulf states to find alternative financing arrangements. These are not a monetary phenomenon, but an expensive, inefficient and cumbersome way to work around the US dollar banking system.

As dollar credit diminishes, though, these alternative arrangements will turn into permanent features of the monetary landscape, and other currencies will continue to gain ground against the dollar, concludes ‘The Asia Times’.

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Free will trumps determinism in Gulf politics

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Image source: twitter @MohamedBinZayed

China’s mediation to normalise Saudi-Iranian diplomatic ties has been widely welcomed internationally, especially in the West Asian region. A clutch of unhappy states that do not want to see China stealing a march on any front, even if it advances the cause of world peace, mutely watched, notes M.K. Bhadrakumar, Indian Ambassador and prominent international observer.

The US led this pack of dead souls. But the US is also on the horns of a dilemma. Can it afford to be a spoiler?

Saudi Arabia is not only the fountainhead of petrodollar recycling — and, therefore, a pillar of the western banking system — but also America’s number one market for arms exports. Europe is facing energy crisis and the stability of the oil market is an overriding concern.

Saudi Arabia has shown remarkable maturity to maintain that its “Look East” policy and the strategic partnership with China do not mean it is dumping the Americans. Saudis are treading softly.

Yet, the fact remains that the Saudi-Iranian deal drives a knife into the heart of the US’ West Asian strategy. The deal leaves the US and Israel badly isolated. The Jewish lobby may show its unhappiness during President Biden’s bid for another term. China has stolen a march on the US with far-reaching consequences, which signifies a foreign policy disaster for Biden.

Washington has not spoken the last word and may be plotting to push back the peace process from becoming mainstream politics of the West Asian region. The American commentators are visualising that the Saudi-Iranian normalisation will be a long haul and the odds are heavily stacked against it.

The Saudi official said China’s role makes it more likely that the terms of the deal will hold. “It (China) is a major stakeholder in the security and stability of the Gulf,” he noted. The official also revealed that the talks in Beijing involved “five very extensive” sessions on thorny issues. The most difficult topics were related to Yemen, the media, and China’s role, the official said.

Meanwhile, there are positive tidings in the air too — the likelihood of a foreign minister level meeting between Iran and Saudi Arabia in the near future and, more importantly, the reported letter of invitation from King Salman of Saudi Arabia to Iranian President Ebrahim Raeisi to visit Riyadh.

Iranian Foreign Minister Hossein Amirabdollahian remarked on Sunday with reference to the Yemeni crisis that “We [Iran] are working with Saudi Arabia on ensuring the stability of the region. We will not accept any threat against us from neighbouring countries.”

To be sure, the regional environment is improving. Signs of an overall easing of tensions have appeared. For the first visit of its kind in over a decade, the Turkish Foreign Minister was in Cairo and the Egyptian FM has been to Turkey and Syria.

Last week, on return from Beijing, Admiral Ali Shamkhani, secretary of Iran’s Supreme National Security Council headed for the UAE where President Sheikh Mohammed received him.

Soon after that Syrian President Bashar al-Assad arrived in the UAE on an official visit. “Syria has been absent from its brothers for too long, and the time has come for it to return to them and to its Arab surroundings,” Sheikh Mohamed told Assad during their historic meeting at the presidential palace.

Evidently, the regional states are tapping the “feel-good” generated by the Saudi-Iranian understanding. Contrary to the western propaganda of an estrangement lately between Saudi Arabia and the UAE, Sheikh Mohammed is identifying closely with the positive trends in the regional environment.

This is where China’s overarching role fostering dialogue and amity becomes decisive. The regional countries regard China as a benign interlocutor and the concerted attempts by the US and its junior partners to run down China make no impact on the regional states.

Fundamentally, both Saudi Arabia and Iran have compulsions to shift the locus of their national strategies to development and economic growth. This has received scant attention. The Western media has deliberately ignored this and instead demonised the Saudi Crown Prince and created a doomsday scenario for Iran’s Islamic regime.

That said, the known unknown is the tension building up over Iran’s nuclear programme… A Russian-Chinese coordinated effort is needed to forestall the US from raking up the nuclear issue in tandem with Israel and ratchet up tensions, including military tensions, in such a way that a pretext becomes available to destabilise the region and marginalise the Saudi-Iran agreement as the leitmotif of regional politics.

On balance, the regional states are acting on free will, increasingly and eschewing their determinism that was wedded to decisions and actions that were thought to be causally inevitable.

The realisation has dawned now that it is within the capacity of sovereign states to make decisions or perform actions independently of any prior event or state of the universe, stresses M.K. Bhadrakumar.

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Energy News

Chad nationalized all assets and rights of Esso Chad

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The President of the Transition of Chad, Mahamat Idriss Déby Itno, by decree N°0465/PT/PM/MHE/2023 of March 23, 2023, nationalized all the assets and all the rights of any kind arising from the Conventions, Exploration permits, Exploitation Authorizations and Hydrocarbon Transport Authorizations of ESSO Exploration and Production Chad Inc, informs Le Tchad Info.

The company held concessions in a number of productive fields, as well as rights over oil extracted there and a share in a pipeline transporting crude to neighbouring Cameroon for export via the port of Kribi.

Oil Minister Djerassem Le Bemadjiel did not immediately respond to AFP questions as to the reasons for the nationalisation.

In December, his ministry said the government was concerned about the “vital and sovereign assets” of the Doba oil fields and the pipeline in the event of any “irregular operation”.

The vast semi-desert country, lying at the crossroads of eastern and western Africa, is one of the poorest countries in the world.

It became an oil producer and exporter in 2003 and has since become heavily dependent on the sector. Sales account for more than 11 percent of gross domestic product (GDP), according to the World Bank.

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