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BERLIN  —  Germany on Thursday ordered luxury car brand Porsche to recall 22,000 vehicles across Europe over emissions test cheating amid a widening election-year scandal.
Transport Minister Alexander Dobrindt told reporters that “illegal” software disguising the true level of polluting emissions had been discovered in Porsche’s Cayenne and Macan models, which must now be fixed.

“We will order a legally binding recall for these vehicles, just as we have in other cases,” he said.

Dobrindt said that because the affected models are still being manufactured, Berlin would also deny any permits for the vehicles “until new software is available”.

Porsche is a subsidiary of Volkswagen, which admitted in 2015 to cheating regulatory emissions tests in 11 million diesel vehicles worldwide.
Prosecutors in the southwestern city of Stuttgart, a bastion of Germany’s all-important car industry, had said earlier this month they had opened a probe against persons unknown working for Porsche.

The investigation into “suspicion of fraud and false advertising” stems from “possible manipulation of exhaust treatment in diesel vehicles from Porsche AG”.
Porsche spokesman Christian Weiss told AFP at the time that the company “takes the prosecutors’ investigation very seriously” and would “do the utmost to clear up the issue comprehensively and as quickly as possible”.

Volkswagen, the world’s largest carmaker, has admitted to using so-called “defeat device” software to cheat regulatory nitrogen oxides emissions tests.
The devices allowed the cars to spew up to 40 times the permissible limits of nitrogen oxide during normal driving, but this was hidden during emissions testing.
The issue has gained fresh urgency less than two months before Germany holds a general election in which Chancellor Angela Merkel, a champion of the auto industry, is widely expected to win a fourth term.

FRANKFURT AM MAIN — The world's biggest luxury carmaker Daimler reported strong financial results for the first half on Wednesday, but the performance was shaded by scandals around diesel emissions and a suspected cartel.

"The car industry is indeed making headlines at the moment, and not good ones," Chief Executive Dieter Zetsche said during a conference call early Wednesday.

Weekly Der Spiegel reported on Friday that five German firms — BMW, Daimler, and Volkswagen with its subsidiaries Audi and Porsche — had been collaborating for decades on many aspects of car development, production, sales and logistics, disadvantaging customers and suppliers.

Most sensitive is the claim that manufacturers worked together on diesel exhaust filtration systems, a hot topic in Germany since Volkswagen admitted to cheating regulatory emissions tests on millions of cars in 2015.

The European Commission — which can fine companies up to 10 per cent of their annual revenue to punish anticompetitive behaviour — has said it is looking into the allegations.

"I know many wish for more clarity," Zetsche said on Wednesday. "But we are well-advised not to take part in speculation."

The Daimler boss' silence has been matched by the other carmakers who allegedly took part in the cartel.

On the diesel question, the chief executive would only say that "it is worth it to
fight for diesel".

The engines are prized by carmakers as a way of reaching carbon dioxide emissions targets but produce harmful nitrogen oxides in their exhaust.

Daimler was one of the worst performers on the DAX index of blue-chip German shares on Wednesday morning, losing 0.54 per cent to reach 60.73 euros ($70.7) against a market up 0.36 per cent around (10:30 GMT).

Strong financial results 

That was despite robust financial figures, including a record net profit in the second quarter Wednesday after slight growth over 2016's figure, prompting it to confirm forecasts for the full year.

Net profits for the Mercedes-Benz maker increased 0.4 per cent in the second quarter compared with same period in 2016, reaching 2.44 billion euros ($2.83 billion) — slightly short of predictions from analysts surveyed by Factset.

Revenue grew 7 per cent to reach 41.2 billion euros, while operating, or underlying profit added 15 per cent to reach 3.7 billion euros.

Across the whole first six months, revenues increased 9 per cent compared with 2016, to almost 80 billion euros, while operating profit grew 43 per cent to reach 7.8 billion.

Looking to the group's different divisions, Daimler's flagship Mercedes-Benz cars increased unit sales 9 per cent in the second quarter compared with the same period in 2016, to almost 600,000 vehicles, while revenues increased 7 per cent to 23.6 billion euros.

Operating profit at the unit — which overtook arch-rival BMW as the world's largest luxury carmaker in 2016 — grew 70 per cent to reach 2.4 billion euros.

The group also reported growth in unit sales at its trucks, vans and buses divisions in the second quarter.

But all three units reported double-digit falls in operating profit compared with the same period in 2016.

Nevertheless, Daimler remained confident of meeting its full-year forecasts of "significant" increases in both revenue and operating profits.

A recall of three million vehicles for a software update designed to reduce nitrogen oxide emissions will cost some 220 million euros, which the group plans to book in its third-quarter results.

German federal and local authorities and car manufacturers will meet on August 2 for talks on the future of the fuel in Europe's largest economy — with industry leaders hoping to avert cities from efforts to ban diesel vehicles from roads at times of high pollution.

BRATISLAVA — Central and Eastern Europe faces the end of an economic era.
With employment rates at record highs, and workers demanding wages closer to western levels, the cheap-labour model that has driven growth since the fall of Communism is on the way out.
The challenge that faces governments and companies in the region over the coming years is to find new avenues to growth.
A walkout at the Volkswagen (VW) factory in Bratislava last month, the first strike at a major Slovak car plant, led to a 14 per cent pay hike in what has become the latest and starkest sign of the shifting economic landscape.
VW was one of dozens of big Western manufacturers beating a path to Slovakia, the Czech Republic, Poland and Hungary after the fall of communism in search of cheap labour.

The rush eastwards marked the birth of an economic model that transformed the region. But a quarter of a century down the line, the regional labour market is running dry, with record low unemployment rates of around 3-7 per cent across the region.
As a result, wages are rising faster than in the West — led by Hungary with a 12.8 per cent year-on-year leap in March.
Zoroslav Smolinsky, the VW Slovakia union leader who engineered the strike, had joined the production line in 1992, when the plant had just been taken over by Germany’s VW.
He was paid the equivalent of 75 euros a month at the time. “We could live on it,” he said. “We had to.”

Today Volkswagen’s 12,300 workers in Bratislava earn an average of 1,804 euros a month.
Such rates, however, remain less than half the average Volkswagen pay packet in Germany, and Smolinsky says such huge disparity can no longer be justified. 

“Times have changed,” the 48-year-old said. “We’re in the EU and have to keep up with trends and gradually narrow the gap.”
The strike was resolved with the wage increase phased over more than two years, as well as a 500 euro one-off bonus for each employee and an extra day of holiday. VW is not alone in facing rising labour costs and strife.
French carmaker Peugeot and South Korea’s Kia have both raised pay this year in Slovakia, while Audi and Mercedes have faced strike threats in Hungary.
The moves by the car makers are particularly significant because the auto industry represents the lion’s share of foreign investment in Central and Eastern Europe.

Volkswagen units, for example, are the biggest companies in Slovakia and the Czech Republic, while Slovakia has become the world’s top carmaker per capita, producing more than 1 million a year.

Moscow-based investment banking group Renaissance Capital said foreign investors would not abandon existing projects in the region, but new investments were likely to go elsewhere.
“Never again is Central Europe likely to offer what it did in the 1990s,” it said in a note to investors. 

Companies are taking steps to improve productivity via methods like increased automation in order to offset rising costs, say executives, policymakers and analysts. In the longer-term some could go to other countries instead in search of cheaper labour.
Volkswagen signalled it could steer clear of Slovakia for future investments if faced with another costly showdown with workers.
Another sharp rise in wages would “threaten the stability of jobs”, Lucia Kovarovic Makayova, a spokeswoman for Volkswagen Slovakia, told Reuters. “It could happen that the group gives preference to a factory with lower personnel costs when deciding on sourcing production of the next product.”
Renaissance Capital said investors in search of cheap labour would ultimately look further south and east.

“When European business confidence is high again, we think the next wave of investment expansion will lap the shores of Turkey and the southern Mediterranean,” it added, also singling out Morocco, Tunisia, Egypt and possibly Ukraine and Iran.
Filip Eisenreich, CEO of Czech ventilation and cooling system producer Janka Engineering, a unit of India-based Lloyd Group, said his company was raising wages by 7-8 per cent this year and was “pretty much on the edge” in terms of labour costs.

“Further growth [in wages] without concurrent growth in productivity would not be sustainable for us,” he told Reuters.

While labour productivity has long been lower than in Western Europe, “this difference has so far been compensated for by lower wage costs, but those rise faster every year than in western European countries”, he added.
Radek Spicar, vice president of the Czech Confederation of Industry, said intensifying wage pressures were forcing firms to automate more, something his organisation trains. Seminars “have been packed to the roof”, he said.

The issue of wage disparity is a highly charged one that is pervading society and politics across the region.
It is at the heart of a perception among Poles, Slovaks, Czechs and Hungarians that they are seen by Western Europe as second-class Europeans. Politicians have seized on such grievances and have taken up the call for better pay.
Slovak Prime Minister Robert Fico backed the Volkswagen strikers, while in the Czech Republic the ruling Social Democrats have erected billboards ahead of an October election declaring “The End of Cheap Labour”.
However; political and labour leaders aiming to bring wages in line with the West must find alternative paths to economic success. Crucial to this, most agree, is to move industries up the value chain into higher-margin areas.

Big manufacturers share less of their income with employees in Central and Eastern Europe than they do in Western Europe. In the EU, wages on average accounts for 47.5 per cent of economic output, according to Eurostat — but while that figure reaches 50.9 in Germany it drops to just 40.4 in the Czech Republic.

But workers in Central and Eastern Europe are less financially productive. According to OECD data, an hour of work in Germany produces 52.7 euros of German economic output, but just 19.4 euros in the Czech Republic.
Part of the reason is that many Czech firms produce lower-margin components for global chains rather than the finished products that deliver higher margins and profits. 

“We are not just cheaper-labour economy, but also a low-cost economy,” said Spicar. “We are also a supplier economy, part of global production chains, with low share of final products.”

SINGAPORE — Southeast Asian ride-hailing firm Grab said on Monday it expects to raise $2.5 billion in financing, mostly from China's Didi Chuxing and Japan's Softbank, as it strengthens its lead over rival Uber.

Didi, China's ride-hailing leader, and mobile giant SoftBank will invest up to $2 billion while $500 million is expected to come from other new and existing investors.

Grab said it amounts to the largest single financing in Southeast Asia. Both Didi and SoftBank are already investors in Grab.

The Singapore-based firm said it would use the fresh funds to bolster its leading position in the ride-hailing industry and invest in a mobile payment platform called GrabPay.

"We are delighted to deepen our strategic partnership with Didi and SoftBank," said Anthony Tan, Grab's group chief executive and co-founder.

"With their support, Grab will achieve an unassailable market lead in ridesharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia."

Grab said it has a market share of 95 per cent in third-party taxi-hailing and 71 per cent in private-vehicle hailing in Southeast Asia, far ahead of main rival Uber.

Grab offers private car, taxi, motorbike and carpooling services in seven countries and 65 cities across Southeast Asia, a region of 650 million people.

"Starting with transport, Grab is establishing a clear leadership in Southeast Asia's internet economy based on its market position, superior technology, and truly local insight," said Didi founder and Chief Executive Cheng Wei in a statement.

"Both companies look forward to working together with communities and policymakers across Asia to fully embrace the extraordinary opportunities in the upcoming transportation revolution."

Masayoshi Son, chairman and chief executive of SoftBank, described Grab as "a tremendously exciting company in a dynamic and promising region".

WASHINGTON  — After tightening monetary policy last month for the second time this year, the US central bank is expected to pause for the next few months to monitor developments.

The Federal Reserve will leave the benchmark interest rate untouched when it meets on Tuesday and Wednesday, partly because it has yet to begin to wind down its huge stock of bond holdings, and will not make another move on interest rates until that process is under way.

But the Fed also faces a growing conundrum as it waits for signs of long-absent inflation to finally appear.

In the normal course of events, as an economy recovers and hiring increases, that brings with it rising wages and inflation, which in turn prompts the central bank to hike lending rates to keep prices in check while still allowing economic growth to continue.

But despite nearly seven years of uninterrupted job creation and a very low unemployment rate of 4.4 per cent, inflationary pressures and wage gains show little sign of life.

The central bank is running out of explanations.

 It is ‘transitory’ until it is not 

While the Fed is expected to implement one more rate increase late this year, there are divisions among policymakers on the timing.

Minutes from the June meeting of the Federal Open Market Committee, the Fed’s policy-setting panel, show several members were not “comfortable” with plans to increase rates again this year.

Fed Chair Janet Yellen told Congress this month that the central bank was not blind to the data showing inflation stubbornly below the central bank’s 2 per cent target.

“We’re watching it very closely and stand ready to adjust our policy if it appears that the inflation undershoot will be persistent,” she said, but it is too soon to say flat prices are due to more than transitory factors.

Yellen and other economists have pointed to a series of one-off explanations, including lower drug prices and costs for mobile phone plans, some of which will continue to make their impact felt on the annual inflation rate for some months.

But baffled economists are beginning to doubt whether that is the whole story.

“There’s a litany of excuses and reasons why wages have hit a speed bump in the US, why inflation has hit a speed bump in the US,” economist Diane Swonk told AFP.

But she said, “I’m getting to the point where I’m hard pressed to find an explanation. It’s starting to bother me.”

Inflation is not simply weak — it is deserting the battlefield altogether.

The “core” measure of the Personal Consumption Expenditures (PCE)price Index — the Fed’s favourite inflation indicator — has been below the central bank’s 2 per cent target for five years.

Last month, the headline PCE price index contracted for the second time in 2017.

The Consumer Price Index also came in flat in June after contracting in May, dragging the 12-month measure down more than a full percentage point in the last four months.

Central banks ‘in a pickle’ 

Swonk said another explanation is price competition among online retailers, which also has been persistent in other advanced economies like Japan and Germany. 

Even amid growing reports that companies have open positions but cannot find qualified workers to fill them, wage growth has been sluggish at best, at 2.5 per cent.

While June was a strong month for jobs, adding 222,000 net new positions, average monthly job creation in the first half of 2017 still lags slightly behind that of 2016.

“Until you see the whites of the eyes of inflation, the central banks of the world are in a pickle,” Swonk said.

But with only modest growth, including in manufacturing, Tim Duy, an economist at the University of Oregon, said the Fed was under no pressure to move again until December.

“They can simply continue to maintain their current story and wait to see how the data plays out,” he said.

FRANKFURT/MOSCOW — Germany's Siemens tried to distance itself from a Crimean sanctions scandal on Friday, halting deliveries of power equipment to Russian state-controlled customers and reviewing supply deals.

The industrial group said it now had credible evidence that all four gas turbines it delivered a year ago for a project in southern Russia had been illegally moved to Crimea, confirming a series of Reuters reports over the past weeks.

The move is embarrassing for Russia which stands accused of disregarding EU sanctions and of flouting its original agreement with Siemens and it also risks making European companies more cautious about doing business there. The Kremlin declined to comment, saying it was a matter for the companies involved.

Siemens said it had not yet found proof that it had violated sanctions itself, reiterating that the turbines had been locally modified and unlawfully moved to Crimea against its will and in breach of contractual agreements.

Crimea is subject to EU sanctions on energy equipment since Russia annexed the Black Sea peninsula in 2014. Russian President Vladimir Putin has promised to provide the region with a stable energy supply.

"This development constitutes a blatant breach of Siemens' delivery contracts, trust and EU regulations," Siemens said. 

Siemens said it would "take immediate and decisive action" if it discovered further indications that export control regulations had been violated.

Siemens shareholders appeared supportive of its response.

Fund manager Max Anderl of UBS Asset Management, one of the top 20 investors in Siemens, said: "You could ask for the products back but if the customer does not cooperate there is little that can be done. The quick reaction time and the decision taken today show strong governance."

Siemens said it would now divest its minority stake in joint venture Interautomatika (IA), which sources have told Reuters was involved in the installation and commissioning of the turbines in Crimea, and suspend its two representatives on IA's supervisory board. Siemens has a 45.7 per cent stake in the business.

Siemens said it had also reviewed its licensing agreements with Russian companies associated with the matter, and was reviewing potential cooperation between its subsidiaries and other entities around the world regarding deliveries to Russia.

Matthias Schepp, head of the German-Russian chamber of commerce, said: "German companies ought to be able to depend on contracts being upheld."

He added: "The German-Russian chamber of commerce is not aware of any violations on the part of German companies."
Long history 

Munich-based multinational Siemens has been active for 170 years in Russia, where its primary activities are supplying energy equipment and rail technology. 

Its business there has slowed in recent years as the Russian economy struggled with the falling oil price and the impact of sanctions. Siemens made sales of 1.2 billion euros ($1.4 billion) in Russia last year, about 2 per cent of its total.

German business weekly Wirtschaftswoche reported this week that President Vladimir Putin last September promised Sigmar Gabriel, then economy minister and now foreign minister, that the turbines would not end up in Crimea.
Dmitry Peskov, Putin's spokesman, declined to comment when asked by Reuters on Friday whether that was true.

It was not clear whether Russia might retaliate against Siemens by ending cooperation in other areas. Russia uses Siemens trains on its high speed Sapsan rail network. However, those trains cost Moscow over 1 billion euros to buy and cover with a 30-year Siemens service contract.

Siemens also has a joint venture in Russia which manufactures passenger trains. 

Siemens said it would put in place additional controls to ensure that energy equipment in future will only be dispatched once Siemens has confirmed it can be installed at the agreed destination.

Any new business in gas turbine equipment will be executed only by its majority-owned Siemens Gas Turbines Technologies joint venture with Russia's Power Machines, and its wholly owned subsidiary, OOO Siemens, it said.

Siemens spokesman Wolfram Trost said the Crimean affair had not sparked a wider review of compliance at Siemens, which battled a worldwide bribery scandal a decade ago, resulting in a then-record $1.6 billion fine from the US Justice Department.
Siemens renewed its offer to buy back the turbines and cancel the original contract with state-owned Technopromexport (TPE), against whom it is taking legal action intended to stop further deliveries to Crimea and to return the turbines to their original destination of Taman in southern Russia.

Evgeny Rodin, partner at Moscow law firm Vegas Lex, said he doubted the turbines would be returned. "One can assume that while the legal case is ongoing the turbines will be installed," he said.

Russia will press ahead with plans to build two new power stations in Crimea, said Andrei Cherezov, a Russian deputy energy ministry, the RIA news agency reported.

Technopromexport, which is now building the new Crimean power plants, did not respond to a request for comment on Friday.

BEIRUT — An Algerian biomedical engineer is on a mission to make it easier for women to find work in Saudi Arabia by creating the first job-searching website for females in the deeply conservative kingdom. 

Australian-born Naziha Deriche, 23, who was raised in Saudi Arabia, realised after completing her postgraduate studies in Sydney last year that it was hard for her and her friends to find jobs in Saudi Arabia.

"Most of the jobs advertised are... for males in Saudi Arabia. And the working environment is mainly very male dominated here so I felt that there was a problem, sort of a gap," Deriche told the Thomson Reuters Foundation by phone.

So she set up a free website in March this year called "Alajnabia” or foreigner in Arabic, with the aim of increasing the amount of women in the workforce by connecting job seekers with recruiters.

"It's an ironic word. The reason we used that word 'foreign' is the fact that the idea of women working here in Saudi Arabia is so foreign," said Deriche, speaking from Dubai where she is working because she couldn't find a job in her field in Saudi Arabia.

Saudi Arabia is known as one of the world's most gender-segregated nation, where women live under the supervision of a male guardian, cannot drive, and in public should wear head-to-toe black garments. 

But the kingdom is trying to diversify its economy and reduce its reliance on oil with its Vision 2030 economic reform plan setting a target to lift women's participation in the workforce to 30 per cent by 2030 from 22 per cent. 

Women can now work in certain retail and hospitality jobs and this year the Saudi Stock Exchange appointed its first female chair, Sarah Al Suhaimi.

Deriche said she and her friends saw the main issue with female unemployment as not just the few available jobs but also poor advertising. 

Deriche, who is working with 40 recruitment agencies, said the website has had 1,000 resumes uploaded since it was set up and keeps growing.

On the site job seekers can look for work and also employers can advertise jobs and look at the women's resumes.

Jobs are also advertised on website's social media platforms.

"We're creating a healthy environment for competition where people are hired based on their skills, their qualifications, their abilities — rather than connections, or through word of mouth, or through knowing someone," said Deriche. 

"I know people may think it's just a job board, but it was more of a social initiative. I wanted it to be something to simulate women empowerment."

ATHENS — Greek hotel and restaurant employees walked off the job on Thursday to protest against labour reforms prescribed by the country's official creditors in exchange for bailout funds that help Greece stay afloat. 

The Mediterranean country, which has signed up to three bailouts with the European Union and the International Monetary Fund since 2010, relies on tourism to emerge from a huge debt crisis. Summer is its peak tourist season. 

With about 25 million people visiting the country annually, the sector accounts for about 18 per cent of Greece's economic output and employs a fifth of its workforce.

"Tourism grows on workers' backs," read a poster in Athens.

Hundreds of workers rallied in central Athens as part of the 24-hour strike against legislated reforms allowing flexible forms of work and a lower minimum wage for young employees and weakening sectoral wage agreements.

The left-led government was first elected in 2015 on a mandate to increase wages and protect labour rights. 

Anti-austerity strikes are frequent in Greece but turnout in protests has been low in recent years due to despair and fatigue after seven years of austerity that have slashed incomes and sent tens of thousands out of work. 

The jobless rate, at 21.7 per cent in April, remains the eurozone's highest.

LONDON — Britain’s public broadcaster BBC came under fire on Wednesday for its gender pay imbalance after it was forced to reveal how much it pays its top-earning talent.

For the first time in its 94-year existence, the BBC was this year forced to release a list of its employees paid more than £150,000 ($195,000, 170,000 euros) between 2016/2017, after a change in its charter last year.

More than 200 names feature on the list — which includes executives, actors, presenters, writers and technicians — but only one third are women.

Former Top Gear host Chris Evans was revealed to be the highest-paid person, earning over £2.2 million, while presenter Claudia Winkleman was named as the top female earner, pocketing more than £450,000.

Winkleman hosts “Strictly Come Dancing”, Britain’s version of “Dancing With The Stars”.

In a statement, the BBC’s Director General Lord Hall defended the organisation as “more diverse than the broadcasting industry and the civil service” but admitted that “there is more to do”.

“We’ve set a clear target for 2020: we want all our lead and presenting roles to be equally divided between men and women,” he added.

Culture Secretary Karen Bradley told parliament last year that releasing the list would ensure the organisation “produces value for money” for licence fee payers and that more transparency could lead to savings.

Britain’s licence fee, which pays for the BBC, stands at £147 per year.

But Hall defended the organisation’s high salaries, telling BBC radio earlier in the day that it operates in a “very competitive market”.

He argued that the BBC had reduced talent salaries by 25 per cent in the past four years and said publishing the list was a “bad idea” because it could tempt other companies to poach talent.

Questioned on Twitter over his pay, former footballer turned presenter Gary Lineker revealed that he had turned down higher salary offers from a privately owned broadcaster “because I love and value my job and BBC Sport”.

Lineker was the BBC’s second-highest earner last year, pocketing £1.7 million.

Among the other well-known names on the list are ex-tennis professional John McEnroe (more than £150,000) and Doctor Who actor Peter Capaldi (over £200,000).

Presenter Graham Norton also appeared on the list for his radio hosting duty for which he pocketed £850,000, but his overall income is believed to be much higher.

The sum did not include his salary for his famous chat show because it is produced by an independent company.

TEPIC, Mexico — Sweden, the Netherlands and Germany are among the best placed wealthy countries to cope with shocks like large-scale migration due to their strong safety nets, education programmes and economic opportunities, said a global report by KPMG.

Switzerland took first place overall in KPMG’s “Change Readiness Index”, which measures the ability of 136 countries to respond to shocks and long-term trends, such as natural disasters, economic crises and climate change.

Britain, in the early stages of Brexit negotiations to leave the European Union, moved into the top 10. The United States moved up eight places to 12, while Syria and Somalia ranked bottom of the list.

“The countries that tend to be doing better are the ones who have a more inclusive approach to growth,” said Trevor Davies, global head of KPMG’s International Development Assistance Services.

“There’s increasing expectations by citizens who are increasingly better educated, better informed, more engaged, they want to see greater equity,” he told the Thomson Reuters Foundation. 

The biennial index by the accounting and advisory firm analyses the capacities of business, government and civil society, with findings highlighting areas that need improvement — potentially helping policy makers, companies and aid donors, said Davies.

When it comes to migration, national income alone is not a clear indicator of a country’s capacity to accommodate new arrivals, with Spain and Greece struggling to cope, according to the report. 

It said Jordan and Lebanon lacked sufficient capacity to absorb refugees, which also proved a major strain for Chad.

Among African countries, Rwanda was “punching very much above its weight,” with a focus on strengthening its economy and governance helping push it to number 43, above Greece.

Chad, Sudan and South Sudan ranked among the five countries least able to cope with shocks.

Oil-rich Nigeria’s position at 120 demonstrated “wealth in itself is not enough” to prepare countries for change, said Davies, noting it has failed to cut poverty or create enough jobs for its growing population.

High levels of inequality limit the capacity of Latin American countries to respond to shocks, Davies said. While high-income Chile and Uruguay both ranked among the top 30, Mexico stood at 71 and Brazil at 79, with Venezuela languishing at 119 and Haiti at 123.

“Income inequality is one of the key factors that’s holding back a number countries. The countries towards the top of the index that have greater income equality are certainly more prepared for change as they have a greater degree of flexibility in the economy,” said Davies.

In Asia, Singapore slipped from the global top spot to number four, while Japan stood at 21 and China at 36.

Afghanistan ranked lowest among Asian countries for its ability to respond to shocks at 127.

While Asia’s enterprise sector was strong, countries needed to ensure the benefits of growth were better spread across society, said Davies. The region faces complicated demographic challenges with Japan’s population ageing and India’s yet to peak.