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WASHINGTON — US President Joe Biden told Americans on Friday in a rare Oval Office address that the debt ceiling bill passed by Congress after weeks of wrangling saved the country from "economic collapse".

Speaking from behind the historic Resolute Desk on live primetime television, Biden said that the deal resolving the stand-off between Democrats and Republicans was a compromise where "no one got everything they wanted".

"We averted an economic crisis and an economic collapse," he said, adding that "the stakes could not have been higher".

Biden said he will sign the bill, which authorises the government to extend the so-called debt ceiling and renew borrowing, into law on Saturday.

The US Treasury Department had warned that if the debt ceiling was blocked beyond Monday, the country could default on its $31 trillion debt. A default would have likely triggered market panic, huge job losses and a recession, with global implications.

"Nothing would have been more catastrophic," Biden said.

Oval Office addresses have always been reserved by presidents for moments of unique national danger or importance.

Biden used the occasion to project a reassuring, calm tone. Sprinkling his speech with chuckles and smiles, he praised his opponents for negotiating in good faith and promised Americans that he had never felt more optimistic.

Biden said that Congress has now preserved "the full faith and credit of the United States".

But even with the House and Senate putting aside differences to finally rush through an agreement over the last week, the US economy's reputation took a hit.

Ratings agency Fitch said on Friday that it is keeping the United States' 

"AAA" credit rating on negative watch, despite the deal.

Campaign boost? 

The debt ceiling is usually an uncontroversial accounting maneuver approved yearly by Congress. It allows the government to keep borrowing money to pay for bills already incurred.

This year, hard-right Republicans dominating their party's narrow majority in the House of Representatives, decided to use the must-pass vote as leverage for forcing Biden into accepting cuts to many Democratic spending priorities.

This triggered a test of political strength that threatened to end in chaos before the two sides agreed this week on raising the debt ceiling while freezing some budgetary spending in return — yet stopping well short of Republican demands for cuts.

Kevin McCarthy, the speaker of the Republican-led House, had touted the compromise bill as a big victory for conservatives, although he faced a backlash from hardliners on the right who said he made too many concessions.

But Biden, who is campaigning for reelection in 2024, sees the dramatic resolution to the crisis as a win, showcasing his negotiating powers and his pitch to be the moderate voice in an increasingly extreme political landscape.

He burnished those credentials in the speech by going out of his way to praise McCarthy, a politician long loyal to former president Donald Trump — the man Biden defeated in 2020 and who is seeking his own return in 2024.

"I want to commend Speaker McCarthy. You know, he and I, we and our teams, were able to get along, get things done," Biden said, calling the Republican negotiators "completely honest and respectful of one another".

TUNIS — Tunisia's President Kais Saied on Thursday proposed taxing the North African country's wealthiest citizens as a way of avoiding what he has called the "diktats" of the International Monetary Fund (IMF).

Despite reaching an agreement in principle last October on a bailout package worth nearly $2 billion, talks with the IMF have stalled for months over demands to restructure public bodies and lift subsidies on basic goods.

Saied said during a meeting with Prime Minister Najla Bouden that the current subsidy system benefits all Tunisians, including the wealthy, a presidency statement said.

He floated the idea of "taking surplus money from the rich to give to the poor", citing a quote attributed to Omar Ibn Al Khattab, one of Islam's first caliphs.

"Instead of lifting subsidies in the name of rationalisation, it would be possible to introduce additional taxes on those who benefit from them without needing them," Saied added.

He said he believed such a mechanism would mean the country would not have to bow down to "foreign diktats".

Saied did not say how such a plan might operate as employees' taxes are deducted at source and many Tunisians in the private sector do not declare their full income.

The IMF has called for legislation to restructure more than 100 state-owned firms, which hold monopolies over many parts of the economy and in many cases are heavily indebted.

The country is going through a financial crisis marked by chronic shortages of basic food products.

Political tensions are also running high since Saied launched a sweeping power grab in July 2021, rocking the democracy in the birthplace of the Arab Spring revolts over 10 years previously. 

WASHINGTON — Ajay Banga began his first day at the helm of the World Bank Group on Friday, taking charge of the development lender as it grapples with questions about its future direction.

"We are at a critical moment in the arc of humanity and the planet," Banga wrote Friday morning in an email to staff obtained by AFP, calling on the bank to "evolve" to meet the challenges it now faces.

An Indian-born, naturalized US citizen, Banga was nominated to the position by US President Joe Biden after a successful business career which included a long stretch running the payments company Mastercard.

Banga, 63, has taken over from David Malpass as the bank's 14th president on a pledge to expand the role of the private sector in addressing the world's development needs.

"The scale and diversity of our challenges — poverty and development, pandemics, climate change, conflict, and fragility — are deeply intertwined and threaten our collective ambitions, as decades worth of hard-won progress erode," Banga said in his email. 

"The World Bank's challenge is clear: It must pursue both climate adaptation and mitigation, it must reach out to lower income countries without turning its back on middle income countries, it must think globally but recognise national and regional needs, it must embrace risk but do so prudently," he added. 

"Change is appropriate for the World Bank," he said. "It isn't a symptom of failure or drift or irrelevance, it is a symptom of opportunity, life, and importance." 

Banga took over the top job at the World Bank from Malpass, who stepped down early from his five-year term amid questions about his stance on climate change.

Under an increasingly contentious unwritten arrangement, a US citizen has historically held the presidency of the Washington-based development lender, while the International Monetary Fund has been run by a European.

In his final message as World Bank president on Thursday, Malpass touted the World Bank's role in "quickly" mobilizing resources to respond to the COVID-19 pandemic and war in Ukraine, and highlighted the doubling of climate financing for developing countries under his watch.

"One of my key priorities while at the Bank has been to foster more debt transparency and sustainability — both essential to bolster investment and growth in developing economies," he wrote in the statement posted on LinkedIn.

SYDNEY — Global mining giant BHP said Thursday it had been underpaying thousands of Australian staff for more than a decade, an error that will cost at least $280 million to fix.

The company said 28,500 current and former employees were stripped of paid leave they were entitled to. 

BHP Australia president Geraldine Slattery said the error would be rectified "as quickly as possible" and "with interest".

The company did not explain how the error occurred.

"We are sorry to all current and former employees impacted by these errors. This is not good enough and falls short of the standards we expect at BHP," Slattery said.

BHP expects to have a fuller estimate of the cost of the error when it reports earnings in August, but it put the initial price tag at "$280 million pre-tax".

The company's share price fell almost one percent on the news.

BHP is one of the world's largest companies, and a leading producer of metallurgical coal, iron ore, nickel, copper and potash.

Australia has some of the world's strongest labour protections and it is not uncommon for companies to discover problems with past payrolls and be forced to rectify the situation.

BEIJING — Elon Musk and China's industry minister discussed ways to develop new energy vehicles Wednesday, a day after the Tesla CEO flew into Beijing and declared he wanted to expand his business in the world's second largest economy.

The mercurial billionaire, one of the world's richest men, is on his first trip to China in more than three years.

On Wednesday he met Jin Zhuanglong in Beijing to discuss "the development of new energy vehicles and intelligent connected vehicles", the Ministry of Industry and Information Technology said in a readout.

It did not share further details. Tesla representatives did not respond to AFP requests for further information on Musk's itinerary.

Musk has extensive business interests in China and on Tuesday told foreign minister Qin Gang that his firm was "willing to continue to expand its business in China", according to a foreign ministry readout.

Chinese media reported Tesla welcomed its CEO to Beijing on Tuesday with a 16-course dinner that included seafood, New Zealand lamb and traditional Beijing-style soybean paste noodles. 

China is the world's biggest electric vehicle market and Tesla announced in April it would build a second massive factory in Shanghai, which would be its second plant in the city after Gigafactory, which broke ground in 2019.

In his meeting with Qin on Tuesday, Musk also expressed his opposition to an economic "de-coupling" between China and the United States, Beijing said.

"The interests of the United States and China are intertwined, like conjoined twins, who are inseparable from each other," Musk added.

Musk's extensive business ties to China have raised eyebrows in Washington, with President Joe Biden saying in November that the executive's links to foreign countries were "worthy" of scrutiny.

And he has caused controversy by suggesting the self-ruled island of Taiwan should become part of China — a stance welcomed by Chinese officials but which deeply angered Taiwan.

Critics point to the industrial ties linking Musk to China, which has increasingly fraught ties with Washington.

Chinese foreign ministry spokeswoman Mao Ning said on Tuesday that the country welcomed visits by international executives "to better understand China and promote mutually beneficial cooperation".

ISTANBUL — Turkey's economy is in a double bind: analysts see its current policies leading to imminent peril and the prescriptions incurring massive pain.

President Recep Tayyip Erdogan campaigned round the clock to win the toughest election of his two decades in power in a historic runoff last weekend.

He also poured billions of dollars into campaign pledges — and tens of billions more into keeping the lira from suffering politically sensitive falls before the vote.

Analysts at Capital Economics think Turkey now faces its post-election "day of reckoning".

Turkey's once-vibrant economy — driven by relatively cheap labour and a well-oiled banking system — is confronting a self-inflicted problem few other countries have faced.

Erdogan has waged a lifelong war on high interest rates that he occasionally attributes to his faith in Muslim rules against usury.

He calls high rates "the mother and father of all evil" promoted by a foreign "interest lobby".

Erdogan sped through a series of central bankers before finding one willing to follow through on his desire to slash rates at all costs in 2021.

The results were dire.

Freefall 

The lira entered a freefall and the official annual inflation rate soon touched 85 per cent. The unofficial one estimated by economists — and believed by most Turks — neared 200 per cent.

Analysts see the most recent period of chaos as the culmination of Erdogan's gradual departure from the prosperous policies of his first decade of rule.

Foreign investors have largely abandoned Turkey because of its political instability and Erdogan's takeover of state institutions that were once run by impartial technocrats.

"The balance sheet so far of Erdogan's two decades in power has been the progressive destabilisation of the economy," Conotoxia investment firm market analyst Bartosz Sawicki said.

"Foreign equity exposure to Turkish bonds is estimated to have declined by around 85 per cent since 2013, during which time the lira has lost around 90 per cent against the dollar."

Turkey's most immediate problem is that its central bank is running out of cash.

It burned through nearly $30 billion supporting the lira this year alone.

The bank's net international reserves — a technical measure of how much it has to spend on emergencies — have dropped into negative territory for the first time since 2002.

"The current setup is just not sustainable," London-based emerging markets economist Timothy Ash said.

Export competitiveness

Analysts have two simple solutions: Quickly hike interest rates and let the lira float freely again.

Turkey's currency support measures have wiped out the benefits low interest rates gave its loan-dependent producers.

The cars and jewellery Turkey exports in places such as the United States and Europe now simply cost too much.

Analysts at Allianz said the lira has "appreciated by around 35 per cent in real effective terms since the unorthodox monetary policy stance took full effect in December 2021".

The lira was hovering near a record 20.3 to the dollar on Tuesday. Analysts at JPMorgan think it could reach the 30 mark if the government stopped intervening.

This would further erode people's purchasing power and potentially require the government to find billions of dollars to spend on new social support measures.

The vicious cycle could be broken by a sharp interest rate hike — something Erdogan has repeatedly ruled out during the campaign.

Atilla Yesilada, analyst at Turkish consultancy GlobalSource Partners, worries that they country may simply start printing money to pay for the huge hikes in benefits and wages Erdogan promised during the campaign.

'Soft capital controls' 

Turkey must also find vast sums — estimated at roughly $100 billion — to pay for the reconstruction of cities destroyed by a February earthquake that claimed more than 50,000 lives.

"How any government would finance the reconstruction effort without printing money and leading to hyperinflation is a question that people prefer not to address at this point," Yesilada said.

Analysts agree that Turkey would eventually have no choice but to raise rates.

Emre Peker, Europe director at the Eurasia Group political risk consultancy, said Turkey would first try to contain demand for dollars through "soft capital controls on locals".

But Erdogan could relent and raise rates once March 2024 municipal elections involving Turkey's biggest cities are out of the way.

Allianz said they should go up from the current 8.5 per cent to at least 20-25 per cent — the current rate of bank deposits.

But that would create still more problems.

"Raising rates will reduce bank capital," Yesilada warned. "Banks will not be able to lend for a long time."