Business

By Delil Souleiman with Alice Hackman in Beirut
Agence France-Presse

RUMAYLEH, Syria — Syria's longest river used to flow by his olive grove, but today Khaled Al Khamees says it has receded into the distance, parching his trees and leaving his family with hardly a drop to drink.

"It's as if we were in the desert," said the 50-year-old farmer, standing on what last year was the Euphrates riverbed.

"We're thinking of leaving because there's no water left to drink or irrigate the trees."

Aid groups and engineers are warning of a looming humanitarian disaster in northeast Syria, where waning river flow is compounding woes after a decade of war.

They say plummeting water levels at hydroelectric dams since January are threatening water and power cut-offs for up to five million Syrians, in the middle of a coronavirus pandemic and economic crisis.

As drought grips the Mediterranean region, many in the Kurdish-held area are accusing neighbour and archfoe Turkey of weaponising water by tightening the tap upstream, though a Turkish source denied this.

Outside the village of Rumayleh where Khamees lives, black irrigation hoses lay in dusty coils after the river receded so far it became too expensive to operate the water pumps.

Instead, much closer to the water's edge, Khamees and neighbours were busy planting corn and beans in soil just last year submerged under the current.

The father of 12 said he had not seen the river so far away from the village in decades.

"The women have to walk 7 kilometres just to get a bucket of water for their children to drink," he said.

'Alarming' 

Reputed to have once flown through the biblical Garden of Eden, the Euphrates runs for almost 2,800 kilometres across Turkey, Syria and Iraq.

In times of rain, it gushes into northern Syria through the Turkish border, and flows diagonally across the war-torn country towards Iraq.

Along its way, it irrigates swathes of land in Syria's breadbasket, and runs through three hydroelectric dams that provide power and drinking water to millions.

But over the past eight months the river has contracted to a sliver, sucking precious water out of reservoirs and increasing the risk of dam turbines grinding to a halt.

At the Tishrin Dam, the first into which the river falls inside Syria, director Hammoud Al Hadiyyeen described an "alarming" drop in water levels not seen since the dam's completion in 1999.

"It's a humanitarian catastrophe," he said.

Since January, the water level has plummeted by 5 metres and now hovers just dozens of centimetres above "dead level" when turbines are supposed to completely stop producing electricity.

Across northeast Syria, already power generation has fallen by 70 per cent since last year, the head of the energy authority Welat Darwish says. 

Two out of three of all potable water stations along the river are pumping less water or have stopped working, humanitarian groups say.

'Water weapon'? 

Almost 90 per cent of the Euphrates flow comes from Turkey, the United Nations says.

To ensure Syria's fair share, Turkey in 1987 agreed to allow an annual average of 500 cubic metres per second of water across its border.

But that has dropped to as low as 200 in recent months, engineers claim.

Inside Syria, the Euphrates flows mostly along territory controlled by semi-autonomous Kurdish authorities, whose US-backed fighters have over the years wrested its dams and towns from the Islamic State group.

Turkey however regards those Kurdish fighters as linked to its outlawed Kurdistan Workers' Party (PKK), and has grabbed land from them during Syria's war.

Syria's Kurds have accused Ankara of holding back more water than necessary in its dams, and Damascus in June urged Turkey to increase the flow immediately.

But a Turkish diplomatic source told AFP Turkey had "never reduced the amount of water it releases from its trans-boundary rivers for political or other purposes".

"Our region is facing one of the worst drought periods due to climate change," and rainfall in southern Turkey was "the lowest in the last 30 years", this source said.

Analyst Nicholas Heras said Turkey did hold leverage over Syria and Iraq with the huge Ataturk Dam just 80 kilometres from the Syrian border, but it was debatable whether Ankara wanted to use it.

That would mean "international complications for Ankara, both with the United States and Russia", a key Damascus ally across the table in Syria peace talks.

"The easier, and more frequently utilised, water weapon that Ankara uses is the Alouk plant" that it seized from the Kurds in 2019, Heras said.

Fresh water supply from the station on another river has been disrupted at least 24 times since 2019, affecting 460,000 people, the United Nations says.

'Drought is coming'

But Syria analyst Fabrice Balanche said the drought did serve Ankara's long-term goal of "asphyxiating northeast Syria economically".

"In periods of drought, Turkey helps itself and leaves the rest for the Kurds, in defiance and in full knowledge of the consequences," he said.

Wim Zwijnenburg, of the PAX peace organisation, said Turkey was struggling to provide enough water for "megalomanic" agricultural projects set up in the 1990s, a challenge now complicated by climate change.

"The big picture is drought is coming," he said. 

"We already see a rapid decline in healthy vegetation growth on satellite analysis" in both Syria and Turkey.

A UN climate change report this month found human influence had almost definitely increased the frequency of simultaneous heatwaves and droughts worldwide.

These dry spells are to become longer and more severe around the Mediterranean, the United Nations has warned, with Syria most at risk, according to the 2019 Global Crisis Risk Index.

Downstream from the Tishrin Dam, the Euphrates pools in the depths of Lake Assad.

But today Syria's largest fresh water reservoir too has withdrawn inwards.

On its banks, men with tar-stained hands worked to repair generators exhausted from pumping water across much further distances than in previous years.

Agricultural worker Hussein Saleh, 56, was desperate.

"We can no longer afford the hoses or the generators," said the father of 12.

"The olive trees are thirsty and the animals are hungry." 

At home, in the village of Twihiniyyeh, power cuts had increased from nine to 19 hours a day, he said.

At the country's largest dam of Tabqa to the south, veteran engineer Khaled Shaheen was worried.

"We're trying to diminish how much water we send through," he said.

But "if it continues like this, we could stop electricity production for all except... bakeries, flour mills and hospitals."

'Short on food' 

Meanwhile, among five million people depending on the Euphrates for drinking water, more and more families are ingesting liquid that is unsafe.

Those cut off from the network instead pay for deliveries from private water trucks.

But these tankers most often draw water directly from the river — where wastewater concentration is high due to low flow — and these supplies are not filtered. 

Waterborne disease outbreaks are on the rise, and contaminated ice has caused diarrhoea in displacement camps, according to the NES Forum, an NGO coordination body for the region.

Marwa Daoudy, a Syrian scholar of environmental security, said the decreasing flow of the Euphrates was "very alarming".

"These levels threaten whole rural communities in the Euphrates Basin whose livelihood depends on agriculture and irrigation," she said.

Aid groups say drought conditions have already destroyed large swathes of rain-fed crops in Syria, a country where 60 per cent of people already struggle to put food on the table.

In some communities, animals have started to die, the NES Forum has said.

The United Nations says barley production could drop by 1.2 million tonnes this year, making animal feed more scarce.

Balanche said Syria was likely facing a years-long drought not seen since one from 2005 to 2010, before the civil war.

"The northeast, but also all of Syria, will be short on food, and will need to import massive quantities of cereals."

Downstream in Iraq, seven million more people risked losing access to water from the river, the Norwegian Refugee Council's Karl Schembri said.

"Climate doesn't look at borders," he said.

NEW YORK — Stock markets jumped on Friday after Federal Reserve (Fed) Chair Jerome Powell took a cautious stance on a potential withdrawal of the central bank's huge economic stimulus measures later this year.

Major Wall Street indices closed at records after Powell delivered his annual speech at the virtual Jackson Hole central banking symposium, while European trading ended positively after a quiet session.

Powell's address was closely watched for signs of the Fed's plans to reduce the bond-buying that has helped support the pandemic recovery, and for any indications of when the bank could see interest rates rising.

Despite the impact of the fast-spreading Delta variant of COVID-19, Powell said the US economy has continued to recover and shown strong job growth.

But he stressed that there was no hurry to raise interest rates, arguing that current inflation pressures will be temporary, and repeated the Fed's stance that "it could be appropriate to start reducing the pace of asset purchases this year".

His remarks came after some other Fed members had argued that the bank could taper its asset-buying scheme this year.

"We finally heard from the Fed chairman and the markets loved it, even though he said what many had expected, that tapering bond purchases could begin before the end of the year," said Fawad Razaqzada, market analyst at ThinkMarkets.

Powell's comments were "interpreted by the market as the Fed chair offering no fresh news and people who had betted on him providing some clear tapering timeline were left disappointed," Razaqzada said.

Asian markets, which closed before the speech, ended the day mixed.

Powell spoke after new government data showed that a key US inflation gauge climbed again last month and spending slowed.

The personal consumption expenditures price index — the Fed's preferred measure of price increases — rose at a rapid 4.2 per cent pace in July compared to the same month in 2020. 

Spending dropped to 0.3 per cent, in what analysts viewed as a consequence of the Delta variant of COVID-19, making some consumers hesitant.

"While pandemic fatigue is setting in and leading to strong emotional responses, we believe cooler consumer spending growth is more likely than consumers retrenching and the economy going into reverse," Lydia Boussour of Oxford Economics said.

The surge followed a drop on Wall Street on Thursday, with sentiment jolted by geopolitical concerns after a suicide attack at Kabul airport that left scores dead, including 13 US servicemen.

Meanwhile, oil prices, which have enjoyed a strong run this week after recent hefty selling, saw more big gains on Friday as traders bought into the view that the Delta variant's spread will only delay the economic recovery and demand will continue to improve.

OPEC member states and their producer allies will hold their latest virtual output meeting next Wednesday.

ALGIERS — Algeria said on Thursday it was ready to divert all its Spain-bound natural gas exports via an undersea pipeline that bypasses Morocco, state media said, two days after Algiers cut ties with its North African rival.

In a meeting with Spanish Ambassador Fernando Moran, Energy Minister Mohamed Arkab stressed "Algeria's full commitment to cover all of Spain's natural gas supplies through the Medgaz" pipeline, said a statement quoted by the official APS news agency.

Algeria exports natural gas to Spain via both the Medgaz pipeline and the higher-capacity GME pipeline which runs overland through Morocco.

But on Tuesday Algiers abruptly cut diplomatic relations with its western neighbour over alleged "hostile actions", accusations the kingdom has dismissed as "absurd".

The rift came just over two months before the GME pipeline, currently owned by Spanish gas giant Naturgy, passes into Moroccan ownership on November 1.

Negotiations over Algeria's continued access to the pipeline had already been complicated by growing strains in ties between Algiers and Rabat.

Last Saturday, Morocco had said it wanted to keep open the GME pipeline, which carries about half of Algeria's gas exports to Spain.

But ties have collapsed, particularly after Algeria accused Morocco of complicity in deadly forest fires that killed at least 90 people.

Morocco's normalisation of ties with Israel last year as a quid pro quo for US recognition of Moroccan sovereignty over the Western Sahara also angered Algiers. 

The Medgaz pipeline's capacity of some 8 billion cubic metres per year to Spain is set to be expanded by 25 per cent later this year.

But this higher capacity alone will not be able to handle what Algeria has historically exported to Spain, according to the Middle East Economic Survey.

But Arkab on Thursday "highlighted recently launched projects such as expansion of the capacity of Medgaz" which Naturgy has said should come online in the final quarter of 2021.

NEW YORK — In the wake of full US approval for the Pfizer/BioNTech anti-COVID vaccine this week, more and more American companies are looking at mandatory vaccinations for employees — and customers.

CVS Health, Chevron, Disney and Goldman Sachs are among the firms who have since told some or all of their workers that inoculations will no longer be optional, requiring proof of shots within a certain time period.

On social media, some of those firms are coming under attack from users who say requiring vaccinations is a violation of personal freedoms, a value near and dear to most Americans. 

One Republican state lawmaker from Florida, Anthony Sabatini, even filed a proposal that would prevent the state's surgeon general from requiring any vaccinations, ever.

But at least so far, amid a surge in coronavirus infections and hospitalisations fuelled by the highly transmissible Delta variant, no public figure is specifically hitting out at corporate America — at least not yet.

For Mark Hass, a professor who specialises in marketing at Arizona State University, even though the crisis is both medical and political it is impossible for companies to thread the needle between liberals and conservatives on the issue.

"The right way to think about this is what's the right thing for our employees, rather than worrying about the safety of our reputation," Hass said.

"Almost every company is going with some sort of mandate or requirement or incentive," he said.

"I think the lack of criticism of corporations is because most of them have acted responsibly in dealing with the pandemic," Hass added, noting the rise of telework.

 'Do what I did' 

Since June, when banking giant Morgan Stanley and asset manager BlackRock said employees wishing to come into the office would have to provide proof of vaccination, other major companies had made the leap to requiring shots.

Google, Facebook and Uber all joined the vaccination mandate bandwagon.

But the Food and Drug Administration's full approval of the two-dose Pfizer vaccine regimen opened the floodgates, and seemed to cancel out the argument made by some sceptics that full authorisation was needed.

"Do what I did last month: Require your employees to get vaccinated or face strict requirements," President Joe Biden said on Monday. In late July, he had offered federal employees a choice: Show proof of vaccination or submit to regular testing.

Nevertheless, some major groups have yet to budge.

American Airlines is "strongly encouraging" its employees to get injections, but is not requiring them so far. For those who do bite the bullet, the airline is offering an extra day off and $50.

On Tuesday, rival Delta Air Lines said it would charge unvaccinated workers an additional $200 a month for health insurance "to address the financial risk" created for the company by "the decision to not vaccinate", according to CEO Ed Bastian.

Among the largest employers in the country, Amazon, Home Depot, FedEx, UPS and Target have not yet mandated vaccinations against COVID-19. Walmart has so far only asked headquarters employees to get shots, not workers in stores or warehouses.

Legal risk limited 

Experts generally agree that companies face limited legal liability for imposing vaccination requirements, even if failure to comply leads to an employee being fired.

In May, the US Equal Employment Opportunity Commission, a federal agency tasked with enforcing laws against workplace discrimination, said an employer's request to show proof of vaccination did not violate American labour law.

Then in June, a federal judge in Houston dismissed a suit brought by employees of Houston Methodist Hospital who were contesting the institution's right to demand that they be vaccinated — a decision seen as one setting a precedent.

And in August US Supreme Court Justice Amy Coney Barrett refused to block a plan by Indiana University to require students and employees to get vaccinated.

"By early July, we were pretty confident that mandatory vaccination policies are permissible, so long as you're making the required accommodations necessary for employees with medical conditions or based on religious belief," explains Mark Goldstein, a partner at Reed Smith LLP in New York who specialises in labour law.

"I'm sure you will see some challenges, but the courts and the government do not seem receptive to those arguments," Goldstein noted.

"I think they'll be shut down pretty quickly. I would highly doubt any of the cases will get to the US Supreme Court."

WASHINGTON — Facebook is ready to launch a digital wallet that would let users store cryptocurrencies, a senior company executive said in a US media interview on Wednesday.

David Marcus, head of Facebook's crypto unit, told The Information news site that company leaders "feel pretty committed" to launch the digital wallet called Novi this year.

Marcus said he would have preferred to release Novi alongside Diem, a digital currency tied to the dollar that the company is also developing, but Diem's timing was uncertain.

"In theory, Novi could launch before Diem, but it would mean launching without Diem and that's not necessarily something that we want to do," Marcus told The Information.

"It all depends on how long it's going to take for Diem to actually go live and that's not something I'm personally looking after."

In 2019, Facebook said it plans to introduce a cryptocurrency that at the time was called Libra. The project however faced regulatory resistance over concerns about security and reliability.

In December 2020, the Libra changed its name to Diem and moved its operations from Switzerland to the United States as part of a "strategic shift.

HONG KONG — Asian markets mostly fell on Thursday as hopes for the global recovery and signs of a possible slowdown in new virus infections play off against the prospect of an end to Federal Reserve largesse and China's regulatory clampdown.

Equities and oil have by and large enjoyed a positive week, helped by US full approval of Pfizer-BioNTech's vaccine and speculation the Fed will take its time in removing its ultra-loose monetary policy whenever it begins to do so.

However, while Wall Street continued to chalk up new records, Asian investors shifted a little more cautiously as they assessed the outlook.

Top of the agenda this week is Fed boss Jerome Powell's speech on Friday to the Jackson Hole symposium of central bankers and economists, which will be closely followed for any indication about its policy plans in light of rising inflation and the economic rebound.

The bank is widely expected to begin easing back on its vast bond-buying programme by the end of the year, though the spread of the Delta variant and its impact on growth has some observers and even hawkish Fed members rethinking the wisdom of doing so.

Analysts said the speed and timing of a pullback could be crucial."When the Fed actually announces the taper, it will likely also give some degree of information on what pace it will take and how flexible or inflexible they want to be with the process," Guneet Dhingra, at Morgan Stanley, said.

"That could provide a key signal for the rate-hike cycle -- particularly with regard to the pace of the hikes."

However, some warn that starting to taper too late could cause problems.

"It would be dangerous for the Fed to do this because it needs to be in a position -- from the middle of next year -- to start putting out the rhetoric that they may be raising rates," said Steven Barrow, of Standard Bank Group.

"And we know it's not out of the realm of possibilities that the Fed could lift rates some time around the end of next year. So I'm focused more on the end point for Fed tapering than the starting point."

Asian investors struggled to maintain Wall Street's rally.

Hong Kong led losses as tech firms were dragged down by weak earnings results that came as China embarked on its crackdown on the industry, while Shanghai, Tokyo, Sydney, Singapore, Wellington, Manila and Jakarta also fell. However, Tokyo, Taipei, Mumbai and Bangkok eked out gains.

Seoul was also in the red after South Korea became one of the first major economies to start lifting interest rates since they were cut to record lows last year to battle the coronavirus impact.

The central bank move came as it looks to tackle surging household debt and sharp rises in property prices. The won jumped against the dollar after the announcement.

London, Paris and Frankfurt all fell soon after opening.

Traders are also keeping a keen eye on China after it rattled world markets in recent weeks with a wave of regulations aimed at winding in private firms -- particularly in the tech sector -- it considered to have become too powerful and posed security risks.

While there has been little noise out of Beijing lately, the state-backed People's Daily reported that Xi Jinping had said China should try to achieve key economic and social development objectives this year.

While it did not set out specifics, the president has embarked on a mission to rein in the country's tycoons and powerful organisations, instead focusing on "common prosperity".

BEIJING — China reopened a key terminal at the world's third-busiest cargo port on Wednesday, after a shutdown to control the coronavirus caused backlogs through supply chains — but disruptions at a major airport are now sending transport costs soaring.

Several cargo aircraft workers at Shanghai Pudong International Airport tested positive for the coronavirus in the past week, sparking a suspension in freight operations.

That has led to a spike in air freight rates of "around 30 per cent", SEKO Logistics told AFP.

The company added that it has rerouted cargo to different airlines and airports to avoid delays, after the current suspension starting last Friday.

"The closure is currently estimated to last around seven to 14 days," it said.

There have been flight cancellations at Pudong while in the industry, staff resignations following tighter quarantine rules have dragged handling times and created a "backlog for upcoming flights", said logistics company Ligentia in another recent statement.

The situation piles stress on already-stretched global supply chains.

The shipping network is still reeling from recent port closures, as exporters work to meet soaring demand for goods from Western consumers and comply with strict domestic virus controls.

The air cargo disruptions come shortly after a partial halt at the eastern Ningbo-Zhoushan port, starting two weeks ago when a worker at its Meishan terminal tested positive for the coronavirus.

The terminal handles a fifth of the container volume at Ningbo-Zhoushan and the hold-up forced ships to other Chinese ports, which were left facing their worst levels of congestion in seven years, reported Chinese media outlet Caixin this week.

The Ningbo-Zhoushan port handled almost 1.2 billion tonnes of goods in 2020.

But Ningbo authorities said late Tuesday that restrictions will be lifted from Wednesday morning.

Calling for a "resumption of work and production", authorities added that business should also prioritise loading and unloading stranded trucks, said a notice republished by state broadcaster CCTV.

Chinese port workers are routinely tested for COVID-19, and the affected worker had been fully vaccinated.

Similarly, the infected air cargo workers in Shanghai were fully vaccinated as well, according to state media reports.

China has been battling a resurgence of COVID-19 in recent weeks caused by the highly infectious Delta variant, but strict lockdowns and mass testing has helped push new case numbers back down.