Business

By Carlos Mario Marquez, Oscar Batres
Agence France-Presse

SAN SALVADOR — Karen Hernandez sells mobile phone accessories in El Salvador and says business has been through the roof since the country started using Bitcoin as legal tender.

She hopes President Nayib Bukele will ignore calls from the International Monetary Fund (IMF) to drop use of the cryptocurrency.

"It has been a very, very good experience and increased [our sales]. It has taken us to another level of business," said the 45-year-old shopkeeper.

She owns a small store in the historic centre of the capital, San Salvador, where many handmade signs announce "we accept Bitcoin".

The government created a digital wallet called Chivo that lets users make and receive payments with both Bitcoin and the US dollar, which the Central American country adopted in 2001 to help ensure monetary stability.

Bitcoin has been legal tender since September 2021.

E-wallet training 

In the crowded streets of the capital, restaurants, hardware stores, pharmacies and even street vendors accept payment in the cryptocurrency.

Elizabeth Arevalo, 25, works at a computer store in an old building and teaches customers how to navigate the Chivo wallet so they can use it in her store.

"We give the customers a little orientation on how to use the wallet... Once they learn how to use it, they buy something from us. It's a win-win situation," Said Arevalo.

Not everyone has jumped on the bandwagon, though.

"I couldn't care less if they ditch Bitcoin or not, there's no benefit to me, I only work with the dollar, I don't accept Bitcoin," said banana seller Antonio Molina.

'Large risks' 

On Tuesday, the IMF called on El Salvador to stop using Bitcoin as legal tender.

The IMF's board warned "there are large risks associated with the use of Bitcoin on financial stability, financial integrity and consumer protection," as well as with issuing Bitcoin-backed bonds.

Bukele responded on Twitter with a meme from The Simpsons that said: "I see you IMF. That's very nice." 

Since coming to power in June 2019, his government has purchased 1,630 Bitcoins with public funds.

Last year, he also announced new Bitcoin bonds worth $1 billion.

Juan Carlos Perez, 40, who runs a technology and perfume store in San Salvador, says he uses Bitcoin in both his personal and professional life.

"There are risks, I know that... vulnerability in the exchange rate, [no] financial market controlling it. But it's practical," said Perez as he checked the Chivo app on his telephone.

'Fragility' 

El Salvador's government is trying to negotiate a $1.3 billion loan with the IMF, which it needs to also secure other loans. Its stance on Bitcoin has not helped.

"The logical thing would be for the El Salvador government to understand the fragility of its situation," said economist Luis Membreno.

He said El Salvador's financial health "revolves around this deal" with the IMF as it also hopes to secure loans of $400 million each from the World Bank and Inter-American Development Bank, and $200 million from the Central American Bank for Economic Integration.

All those loans are subject to the IMF agreement, Membreno said.

Despite its criticism, the IMF board did acknowledge that the use of cryptocurrencies could widen access to banking services in El Salvador.

Bukele "is not going to back down from a personal project of that magnitude", Membreno said.

His economy minister, Alejandro Zelaya, accused the IMF of contradicting itself by opposing Bitcoin while also claiming it is in favour of "boosting financial inclusion".

"It seems that it [Bitcoin] can provide financial inclusion, but you should not do it. The future does not wait for anyone #Bitcoin," Zelaya wrote on Twitter.

MUMBAI — Google will invest up to $1 billion in India's second-largest mobile operator, Airtel, the companies said on Friday, as the Android-maker looks to bolster its presence in the vast nation's booming telecoms market.

The global tech company will buy a $700 million stake in billionaire Sunil Mittal's Bharti Airtel, giving it 1.28 per cent ownership, the firms said in a joint statement.

Up to $300 million more will be invested in "mutually agreeable" commercial projects over the next five years, including exploring opportunities to "bring down the barriers of owning a smartphone" in the price-conscious market.

"We are proud to partner on a shared vision for expanding connectivity and ensuring equitable access to the Internet for more Indians," Sundar Pichai, the Indian-born chief executive of Google parent Alphabet said in a statement.

Google already holds a 7.7 per cent stake in Indian market leader Reliance Jio, owned by Asia's richest man, Mukesh Ambani, following a $4.5 billion investment in 2020.

The two companies collaborated on a 4G-enabled, low-cost smartphone, launched in November last year.

Jio has been locked in fierce competition with Airtel and British telecoms giant Vodafone's local unit Vi since it kicked off a price war in 2016 by offering dirt-cheap internet and free calls.

TOKYO — The Nissan auto alliance said on Thursday it will invest more than $25 billion in electric vehicles over the next five years, marking the latest massive cash injection into the fast-growing sector by the auto industry.

Nissan, Renault and Mitsubishi Motors said the latest outlay followed $11 billion already spent on its "offensive strategy in electrification", promising 35 new electric models by 2030.

Major global carmakers are increasingly prioritising electric and hybrid vehicles as concern about climate change grows. At present, around 10 per cent of European car sales are EVs, but the US figure is just two per cent.

The alliance vowed to boost cooperation by using five common manufacturing platforms for most models -- adding a new platform in 2024 to the existing four -- as it ploughs 23 billion euros ($25.7 billion) into its EV strategy.

Some of the headline figure had already been announced by each company, but it marks the first concrete target set collectively by the trio since the reorganisation of top executives at Japan's Nissan and France's Renault.

That restructuring was triggered by the saga surrounding the 2018 arrest of former Nissan boss Carlos Ghosn, which exposed rifts in the alliance.

"Three years ago, the alliance was experiencing a crisis unprecedented in its history based on a lack of trust," alliance chair Jean-Dominique Senard told reporters.

But "this period belongs to the past" and the partnership is "stronger than ever" due to solid foundations and flexible cooperation, he said.

"Together, we are making the difference for a new and global sustainable future," Senard added in a statement.

To achieve its goals, the alliance said it aimed to increase cooperation on common platforms from 60 per cent to 80 per cent of its models by 2026.

The trio also announced a target of reaching a total EV battery production capacity of 220 Gigawatt hours by the end of the decade, with Nissan tasked with leading the development of solid-state battery technology.

As demand grows for less polluting vehicles and pressure grows to reduce the auto industry's role in climate change, major automakers are announcing targets to gradually phase out fossil fuel-powered vehicles.

In December, the world's top-selling carmaker Toyota also unveiled a more ambitious plan for its electric vehicle business, hiking its EV sales goal by 75 percent.

German auto giant Volkswagen has also said it will bulk up its investment in electric vehicles and digitalisation to 89 billion euros over the next five years.

Japanese electronics giant Sony recently announced it will found a company this year to explore jumping into the rapidly growing EV market.

NEW YORK — Tesla rode rising demand for electric vehicles to a record $5.5 billion profit in 2021, but Elon Musk's company cautioned on Wednesday that supply chain problems would continue to crimp production through 2022.

The electric carmaker, which scored an 87 per cent jump in auto deliveries last year in spite of the global semiconductor shortage, reported a 71 per cent rise in revenues to $53.8 billion.

But Tesla said it saw no immediate relief from supply chain woes that have hit activity "for several quarters," it said.

"We plan to grow our manufacturing capacity as quickly as possible," it said in a news release that reiterated the company's target of 50 per cent annual growth.

"The rate of growth will depend on our equipment capacity, operational efficiency and the capacity and stability of the supply chain," Tesla said.

"Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through 2022."

Musk said he was heartened by announced new semiconductor capacity that should alleviate the imbalance by the end of 2022 or early 2023. 

But "there could be other issues" that surface this year, he said during a conference call with analysts and investors. 

Musk cited the supply chain issues as a factor in a decision to defer rollouts of new products this year, adding that the company will do engineering of its "Cybertruck" electric pickup with an eye towards a possible launch in 2023.

"The fundamental focus of Tesla is scaling vehicles," Musk said, adding that had the company introduced new models in 2021, it would have resulted in lower overall production.

Musk has previously also discussed introducing a $25,000 electric vehicle, but said that product too was not on the front burner.

"We have too much on our plate," Musk said.

More factories ahead? 

In the most recent quarter, Tesla scored a $2.3 billion profit, up more than eight times the year-ago level as revenues jumped 65 per cent to $17.7 billion.

Tesla has been ramping up production at factories in California and Shanghai, while also building new facilities in Germany and Texas.

Tesla said it began building Model Y vehicles in Texas in late 2021, while it started equipment testing in Germany around the same time.

"We are still in the process of finalising the manufacturing permit from local authorities" in Germany, Tesla said.

Musk said he is looking at adding more manufacturing locations, with further announcements likely in late 2022.

CFRA Research analyst Garrett Nelson characterized the company's cautious remarks on supply chains as unalarming.

"Tesla has become masterful at underpromising and overdelivering and has now beat (expectations) in nine of the past 10 quarters," Nelson wrote. "We reiterate a 'Buy' opinion."

Shares of Tesla gained 0.8 per cent to $944.50 in after-hours trading.

PARIS — Google on Tuesday announced a new plan to stop using small files known as cookies to track people's web browsing habits, after its previous proposals were roundly criticised. 

US tech giants are under huge pressure to overhaul the way they collect data -- Google was fined 150 million euros ($169 million) by France earlier this month over its cookie policies.

Privacy campaigners have pushed hard against the use of cookies, which transmit users' information often to dozens of companies each time they visit a website.

But the files form the backbone of the online advertising industry that has proved hugely profitable for Google and their customers.

The company said on Tuesday it would trial a new system called "Topics", which it said would protect privacy while continuing to allow targeted advertising.

Chrome users will still be tracked and the websites they visit and advertising partners will be given three topics -- broad themes supposed to correspond to their interests -- based on the user's browsing history.

However, the firm said the process of generating topics would take place entirely on the user's device -- even Google itself will not have access.

Advertisers will only be able to retain the topics for three weeks, and Chrome users will have the option of opting out entirely.

"Topics" replaces an earlier idea floated by Google called "Federated Learning of Cohorts (FLoC) ", which caused consternation among advertisers and the media industry.

Critics said the FLoC system would allow Google to hoard user data for itself and cut third parties out of the loop.

"Topics was informed by our learning and widespread community feedback from our earlier FLoC trials, and replaces our FLoC proposal," said senior Google official Vinay Goel.

Internet companies have faced stricter rules since the EU passed a massive data privacy law in 2018 obliging firms to seek direct consent of users before installing cookies on their computers. 

Privacy campaigners have filed hundreds of complaints against companies including Google and Facebook arguing that they make it much easier to opt in than to opt out.

NEW YORK — General Motors announced on Tuesday plans to invest $7 billion in the US state of Michigan as it converts assembly plants and builds batteries for the transition to electric vehicles (EV).

Calling the announcement "the largest single investment in GM history," the auto giant said the push in its Midwestern home state would create 4,000 new jobs and retain 1,000 more positions.

GM has previously projected that it will double revenues by 2030 as it ramps up EV production. The company expects 50 per cent of its North American capacity to be EVs by that date.

"Today we are taking the next step in our continuous work to establish GM's EV leadership by making investments in our vertically integrated battery production in the US, and our North American EV production capacity," said Chief Executive Mary Barra. 

"These investments also create opportunities in Michigan for us to bring our employees along on our transition to an all-electric future."

The biggest component is $4 billion to remake the Orion Assembly plant north of Detroit to enable production of new EVs such as the Chevrolet Silverado and GMC Sierra. 

GM is also spending $2.6 billion to build a new battery plant in the city of Lansing, with the rest going to enhance to assembly plants in the area.

The announcement was applauded by President Joe Biden, who said his administration "has been laser focused on making sure that America leads the manufacturing future of electric vehicles."

Biden, who toured GM's Detroit-area EV plant in November, hailed the $7.5 billion for new EV charging stations included in a $1 trillion infrastructure bill he signed into law last year.

But another Biden initiative to establish higher tax credits for EVs built in union shops like those at GM looks uncertain given congressional gridlock over his Build Back Better social spending and climate change package.

WASHINGTON — Global equity markets that have see-sawed in recent weeks but show signs of "overvaluation" are at risk of a sharp correction as major central banks raise interest rates, a top International Monetary Fund (IMF) official said on Tuesday.

"We are certainly living in very turbulent times," said Gita Gopinath, the newly-installed number two at the IMF, adding that "markets look overvalued in several spots and there is a high level of exuberance".

Wall Street put in an especially dramatic performance on Monday, with the broad-based S&P 500 sinking 3.5 per cent before staging a recovery late in the day and ending with a modest gain.

The index jumped 27 per cent in 2021, but investors have become wary amid rising inflation which has prompted the Federal Reserve (Fed) to signal that a rate hike is coming soon, likely in March.

The Fed's exit from highly stimulative monetary policy is "needed given the strength of the recovery in the US and the inflation pressures that we are seeing", Gopinath told reporters.

"One would expect that as interest rates go up, we will see corrections in markets. The hope is that this will stay orderly." 

There remains a lot of uncertainty about how many times the Fed will raise rates to contain the price increases, and that will weigh on markets, she said.

But as long as the Fed's moves are "well telegraphed" and officials explain the rationale, "That should certainly help with having a more orderly correction in markets."

BEIRUT — Lebanese officials began much-delayed talks with the International Monetary Fund (IMF) on Monday on support measures aimed at lifting the country out of its worst-ever economic crisis.

"We hope the negotiations will be concluded as soon as possible, but given the complexity of the issues it is possible that other rounds will be held," Deputy Prime Minister Saade Chami, who heads the Lebanese delegation, said in a statement.

The talks are taking place online due to COVID-19 restrictions.

Lebanon is hoping to obtain a financial rescue package to rekindle an economy that has been in free fall for two years.

The previous government held several rounds of talks with the multilateral lender, but was unable to secure a bailout, amid a failure by the two sides to agree on the scale of financial losses stemming from the meltdown.

The current government opened a preparatory dialogue with the IMF last year and has settled on a figure of around $69 billion as its estimate for the financial sector's losses, ahead of the talks that began on Monday.

The country defaulted on its sovereign debt in 2020, the currency has lost around 90 per cent of its value on the black market and four out of five Lebanese are now considered poor by the United Nations.

Despite the country's shocking social and economic decline, Lebanon's ruling class has continued to stall reforms demanded by foreign donors ahead of any assistance.

The Cabinet of Prime Minister Najib Mikati met on Monday for the first time since mid-October, after months of political horsetrading between its rival factions.

"In this first round of negotiations and over the next two weeks, we will discuss several topics, including the budget, the banking sector and the exchange rate," Chami said in the statement issued by Mikati's office.

TUNIS — Artificial intelligence (AI) firm InstaDeep, created on two laptops in Tunisia in 2014, has raised $100 million from investors, including Google and BioNTech, the company said on Tuesday.

InstaDeep will use the funding to develop its infrastructure, hire experts and speed up launching AI projects in "biotech, logistics, transportation and electronics manufacturing", it said in a statement.

AI is a branch of computing that builds machines capable of tasks that would normally need human-like intelligence, in everything from virology to transport.

InstaDeep said it had worked with German pharma firm BioNTech to create an immunotherapy lab making use of AI, as well as an AI-powered early warning system for detecting high-risk coronavirus variants.

The firm has also applied AI to complex train scheduling challenges for German railway firm Deutsche Bahn.

InstaDeep chief Karim Beguir said the firm saw "wide-ranging opportunities to deploy our AI products to tackle complex real-world problems".

According to US news channel CNBC, a survey of technology executives found that 81 per cent believed artificial intelligence would be very or critically important to their companies in 2022.