Steering the Economy back to the Path of Growth and Development: The LandAssets Plan Concept

Gabbby Ogbechie, TPG.

Two and one-half years after the transition from the ‘’clueless’’ government of Goodluck Jonathan to the ‘’change’’ government of Muhammadu Buhari, the economy is still mired in the throes of recession. If the classic definition of recession is still the economic situation in which many are out of work, the economy not growing, and wealth not being created, then Nigeria is still wallowing in deep recession.
One would expect that for a government that seeks the welfare of its citizens, the welfare of Nigerian citizens should be the number one priority, but as some of us suspected, the government has rather concerned itself with such divisive policies as the Islamization of Nigeria; a northernization policy which excludes the other regions within the federation from governmental development objectives; paying a blind eye to the destructive activities of Fulani herdsmen or Janjaweed militants; the confusion-fused policy of fighting Boko Haram which it promised to wipe out immediately it assumes office by releasing back into the society, captured Boko Haram terrorists, instead of prosecuting and jailing them; and making the war against IPOB, a non-terrorist organization its priority.

There is this tendency to conjecture that things are the way they are because our political leaders are not truly leaders but managers who can only manage to the level or extent of their capabilities. Most Nigerians are excellent at pointing out the things that are wrong with the economy. However, what Nigeria needs at the moment are leaders who have a map of the Promised Land which the Nigerian ship of State should be steered to.
We therefore feel very deeply about the suffering most of the masses of our countrymen undergo on a daily basis, with no hope, as it were, of things ever getting better. The high rate of unemployment is the reason Boko Haram easily finds recruits; mobs readily gather to maim and lynch; IPOB easily attract adherents; and the embarrassing level of kidnapping, slaughter for body parts and ritual killings tend to be on the increase.
Fifteen years ago, almost to the very date, the Lord God gave me a concept which, when implemented, would get Nigeria back to the path of Economic Growth and Development, and lift many out of the throes of deep and abject poverty. In order to test the Viability of the concept, I engaged my staff at the time in using Nigeria as a test case. Our findings were as follows:
A little over N3.00 trillion in Insurance Premium would be generated per annum;
Over one million enduring jobs would be created;
At the prevailing corporate taxation rate, an additional sum of about N1.67 trillion would be added to government coffers.
The closest I got to the LandAssets Plan scheme being adopted by the Federal Government was in the last government; the problem however was that those who engaged us wanted to take it over; a development we weren’t disposed to accepting.
The LandAssets Plan
The LandAssets Plan is a concept which seeks to increase the volume of property insurance and use it to provide solutions to the world-wide problem of unemployment, and enhance poverty reduction, wealth creation, industrialization, manufacturing and housing provision. Put in a nut shell, the LandAssets Plan could be defined as the compulsory insurance of all urban and semi-urban based Real Estate within an economy, with a view to:

deepening insurance penetration;

increasing insurance volume and increasing appreciably, the Gross Annual

Insurance Premium;

providing therefrom, the required funding for infrastructure provision and maintenance;

providing long term funding for the private sector of the economy;

reducing the cost of funds to single digit from the current, tortuous

Double digit rates; and,

jump-starting the economy from a recessive to a productive one

The Basis for Acceptability
Naturally, the question, what is the basis for the acceptability of the LandAssets Plan Project should be a viable question, since, as has been stated elsewhere, the state of insurance penetration is as low as well under three percent in the Nigerian economy. Given the drive towards attracting higher insurance volume, penetration, and premium, our projections on premiums were considerably lower than what currently obtains in the industry, ranging from 2.5% to 7.5% of units of Real Estate.
Based therefore on premium anyone could derisively refer to as “peppercorn,” the projected increase in insurance volume would be over 500% of the current volume, and would therefore result in a Gross Premium of N3.00 trillion in the first year of implementation of the scheme. Attracting more premiums at lesser premium per unit of Real Estate would therefore result from increased volume of insurance coverage per annum. Without any controversy whatsoever, this makes more sense than insisting on the subsisting rates. Insuring 10,000 houses at N10,000 per unit and grossing N100,000,000.00 per annum makes better sense than covering only 100 units at N100,000.00 per unit and grossing only N10,000,000.00 per annum.

As obtains in so many developing economies, Nigeria is troubled by such economic problems as:
♦ Unavailability of long-term Development Funds;
♦ Infrastructure deficit;
♦High interest rates;
♦ High inflation rates;
♦High rate of Capital flight;
♦ Exchange rates deficiency;
♦ Inadequate housing provision;
♦ Decaying manufacturing infrastructure; and,
♦ Very low rate of industrialization.
The existence of the foregoing problems, result in high unemployment and poverty rates. Such economies are often caught in the throes of recessionary spirals. The problem therefore, properly situated, is the need to conceptualize ways to fund job creation, create wealth, reduce poverty, industrialize the economy, enhance manufacturing, and create the enabling conditions for provision of affordable and adequate housing. Nigeria fits into this mold, and we believe that the LandAssets Plan would work as well in the Nigerian or Greek economy, as well as any economy in which private Real Estate development has been enhanced, but at the peril of the economy.
The State of the Economy Today
In the over thirty odd years since the abrupt end to the second republic, the economy has gone from bad to worse. The pool of the poor has increased at a tremendously scandalous rate. Most efforts at poverty reduction have ended up enhancing the financial status of the same ubiquitous agents that government employs in purchasing the machinery/equipment the beneficiaries of government’s poverty reduction strategies need.
In retrospect, most commentators on the state of the economy have stated without equivocation that the economy is in a worse state now, than was the case thirty odd years ago. It has equally been generally accepted that the problem with the economy, amongst other factors are:
Its mono-cultural nature – oil being the major exportable product, with virtually no value added;
Lack of industrialization;
Lack of long term credit with which to industrialize, enhance the capital formation process, and enhance housing provision for the middle and low income groups.
‘Needs’ and the Restructuring Process
The key to revamping the economy lies in restructuring in such a way such that wastages in every facet of the economy would be, if not entirely eliminated, reduced to the barest minimum. The privatization exercise of the Federal government; the personnel reduction within the Civil Service; and the restructuring of the methods of affecting contractual obligations by the Federal Government, evidence the foregoing assertion. But, at what cost to the economy, especially with regards to the burgeoning army of the unemployed?
However, irrespective of the method found expedient, the object of former President Obasanjo’s NEEDS was to evolve an economy which is restructured to the extent that individuals, small and medium scale enterprises are empowered, through the provision of economic leveraging, by way of venture capital provision and long term credit, to become part of, and play effective roles in evolving a healthy and vibrant economy. The current administration’s resolve to go down the same path is commendable, but given the fact Banks are not given, in this economy, to helping Small Scale entrepreneurs, it is our bet they would make mince-meat of the idea like they have done near similar ideas in the past.
The LandAssets plan, as posited in elsewhere, would, amongst other things:
 Grow the economy by adding trillions of Naira to the GDP during its first year of implementation;
 Add over N… trillion to the GDP over a ten-year period;
 Improve and standardize the Capital Formation process by providing annually for infrastructural development and maintenance;
 Provide long term loan able funds for Industrial, Manufacturing and Housing development;
 Create wealth with the concomitant creation of millions of jobs, traversing the financial {insurance and banking institution}, construction, housing, manufacturing, industrial and service sectors of the economy;
 Raise the funds for giving the economy the required head-start by attracting insurance premium on our national Real Estate, the value of which we have estimated at N 900 trillion;
 Evolve a private sector driven economy which is neither dependent on government nor oil, given that an estimated N15.00 trillion per annum would be realized as Annual Premium during the first five years of implementation;
 Impact the GDP by cumulatively adding over N30.0 trillion to the economy over a ten-year period.

The question naturally, is how is it possible?
We began our enquiry by taking a good look at our economy and its attendant problems, which are typical of most developing African and third world countries. Such problems are as follows:
1. Lack of fully developed capital formation process;
2. Lack of a well-developed manufacturing /industrial sector;
3. Prevalence of high interest (lending) and exchange rates;
4. An external debt overhang, which basically, enslaves third world nations;
5. Lack of long term loans for meaningful Manufacturing/Industrial investments;
6. Lack of response to the phenomenon of the rich getting richer while the poor get poorer;
7. Evidence of non performing wealth all over the economy;
8. Lack of wealth creation schemes;
9. Lack of job creation schemes;
10.Lack of any wealth redistribution scheme or policy.

Ten – Year Cash Flow Projection of The LandAssets Plan
From the projections, deductions and computations we have made, in consonance with our projections above under the subject scheme, we shall be dealing with a net worth of N 900 trillion in Real Estate, country-wide. If allowed to function as projected, our analyses of this net worth show the following computations/ figures for the first five years of implementation of the LandAssets plan:
Capital and Insurable Value ………      N 900 trillion
Rental Value                        ………       N 45 trillion
Annual Premium                 ……….      N 2.7 trillion
Valuation Fee   (ES&V)            ………      N 45 billion
Other Professionals              ………..      N 100 billion
Retention by Insurance Companies…  N2.30 trillion (1st year)
Retention by Insurance Companies … N2.35 billion (2 – 5 yrs)
Coordination/Management Fee …   N 270 billion





N Trillio

RentalValueN Trillion PremiumBuildings      N




Valuation FeeNtrillion OtherProfessionalsNtrillion RetentionIns. CoysNtrillion    Coordination/mngmtFeeNtrillion
1 900 45 2.300 0.700 0.045  0.100 2.33 0.270
2 900 45 2.300 0.700  0.100 2.33 0.270
3 900 45 2.300 0.700  0.100 2.33 0.270
4 900 45 2.300 0.700  0.100 2.33 0.270
5 900 45 2.300 0.700  0.100 2.33 0.270
6 1000 50 2.500 1.000 0.050  0.150 2.515 0.300
7 1000 50 2.500 1.000  0.150 2.565 0.300
8 1000 50 2.500 1.000  0.150 2.565 0.300
9 1000 50 2.500 1.000  0.150 2.565 0.300
10 1000 50 2.500 1.000  0.150 2.565 0.300

Note: We project an annual expenditure of 10% of the insurance companies’ retention [i.e. N23.3 billion] as out-going for Loss Adjustments or claims. This would have the effect of creating more jobs.
Moreover, we shall insist that the foremost qualification for participating in the implementation of the LandAssets Plan by Insurance, Construction, Engineering, Estate Surveying, Law, Banking and members of the Service sectors would be to employ new hands, commensurate with the benefit accruable to them from the LandAssets Plan implementation. We expect to therefrom generate one million jobs within the first year, and another million in the second year.
Implementation would result in the following:
1. the problem of mobilization of long-term capital for investment would be finally and adequately addressed, with the Insurance Companies becoming the major players in the financial economy, as should be;
2. the problem of funding, infrastructural provision, and maintenance would also be over, vide the establishment of the Infrastructure Development and Management Fund (IDMF), to which the participating insurance companies would subscribe, and particular effort would be made to construct roads, fire hydrants, and such other provisions for fighting fire, with a view to blotting out our national shame of always knowing that properties worth billions are regularly destroyed by fire, because of lack of water and other firefighting equipment;
3. Investments in the solid minerals exploitation area by insurance companies vide long term loans and direct investment with their surplus funds from the envisaged Annual Premium;
4. Investments by the insurance companies in other aspects of the industrialization / manufacturing processes;
5. Investments by the insurance companies by granting of loans and direct investments in housing programmes;
6. Elimination of individual losses sustainable by property owners who, prior to the introduction of this scheme, often found it impossible to restore burnt/ destroyed properties;
7. Prompt settlement of claims without recourse to time and finance wasting court actions, and the attendant declining from assumed insurable risks, which itself has the effect of destroying the insuring company’s reputation;
8. Reversing the perceived ignoble trend of foisting the cost of running the economy on the poor;
9. Using the wealth of the rich to administer the needs of the economy in a way that further enhances the benefits to such property owners, thereby fostering a win-win situation between the insuring companies and property owners;
10. Fostering a new economic scenario whereby the poor would accept that government policy is not making further financial demands on them;
11. Creation of employment opportunities in every sector of the economy, thereby generating employment opportunities of at least two million jobs by its second year of implementation;
12. Provision of a conducive economic climate for the implementation of the Economic Transformation Agenda of the Federal Government;
13. Enhancement of the GDP of the economy and the per capita income;
14. Reduction of the lending rate, thereby reducing the misery index of the economy;
15. Effectively evolving a private sector driven economy;
16. Increasing the exportation quotient of the solid mineral sector, thereby increasing the economy’s external / offshore income;
17. Effectively beginning the process of wealth creation and redistribution;
18. Effectively increasing by several folds, the size and capacity of the overall finance sector of the economy; and
19. Effectively transforming the economy for good.
The Way to Implementation
First, it is necessary to state clearly and unequivocally that this is not a proposal to the Federal Government for a contract in the usual use of the term. The Federal Government is not under obligation to pay one kobo to LandAssets Consult. But this, inevitably, is an invitation to partner with LandAssets Consult to enable the Insurance companies to become the backbone of the economy by bridging the economy to the long term capital it is in dire need of.
While the insurance companies would be empowered through this concept to grow from a N350 billion per annum industry to a N3.00 odd trillion one, the Federal Government would benefit by realizing about N1.67 trillion per annum in corporate tax, and a further N500 billion in Special Development Fund Appropriation (SDFA) over a period of five years for which Debt Certificates would be issued to the Insurance companies from which the funds would be appropriated, redeemable over ten year periods.
The above stipulation is necessary because otherwise, the insurance company executives would fritter the whole funds away in Capital Flight, unearned bonuses and other frivolities. Moreover, the SDFA is not to be shared among States or State Governors who have become more adept at making development funds disappear into foreign banks.
The first step therefore towards the implementation of the LandAssets Plan, is a legislation authorizing the Compulsory Insurance of all Urban and Semi-Urban located Real Estate at Designated, Affordable Premium Rates which LandAssets would work out at the appropriate time.
LandAssets Consult would play the roles of Conceptualizer, Manager and Co-coordinator of the project. At the concept stage, LandAssets would be an Insurance Agent, and like the average Insurance Agency, would be entitled to twenty percent of the Revenue it generates for the insurance companies. In addition, LandAssets would manage and co-ordinate the entire process; from allocation of the insurable properties to the realization of the Premium Sums by the Insurance companies.
Without necessarily sounding off, we believe that there is no better plan by any government, corporation or institution, not just in this economy, but in the entire world to harness the latent value in the largest investment in the entire world – Real Estate, and using such funds to create wealth, create jobs, reduce poverty, and enable the processes of Infrastructure Development and Capital Formation than the LandAssets plan.
In a world in which the likes of Jack Ma, the founder and chief executive officer of has resolved to surpass the economies of France and Britain by 2025 through innovation, it is a shame that our economy has consistently gone backwards because of our economy’s reliance on Crude Oil. Give us the place to stand, and we shall not only move Nigeria, but the entire world.
Finally, beyond mere rhetoric, the implementation of the LandAssets Plan will definitely put a check on the migratory tendencies of young Nigerians, who risk life and limb to get to Europe, despite the dehumanizing experiences they undergo in Libya and other migration routes. More than anything, therefore, we believe that the implementation of the LandAssets Plan would help restore the human dignity of the average Nigerian youth.
We look forward to working with the Presidency and the Federal Government towards making the LandAssets Plan concept a reality. We are not aware that there’s a better alternative anywhere else.
Like President Barrack Obama said in one of his ”State of the Union” addresses, “opportunities abound, let’s get to work.” Give a helping hand in reducing poverty. Help us to create wealth.


World hunger increases for first time in a decade, topping 800 million in 2016

After steady progress in fighting hunger, the United Nations announced an increase in the number of chronically hungry people for the first time in over 10 years. Some 11 percent of the world’s population is affected.

Two small children eat from bowls of porridge (imago/epd/S. Vogt)

World Hunger is on the rise after years of steady decline, warns a UN report released Friday.

Most of the world’s hungry people are in Asia and Africa, with 520 million and 243 million, respectively. But proportionally Africa is hardest hit, with 20 percent of people not having enough food – in Asia the ratio is 11.7 percent, according to the reported prepared by the Food and Agriculture Organization of the United Nations, the International Fund for Agricultural Development, the United Nations Children’s Fund, the World Food Program and the World Health Organization.

Overall, the number of chronically hungry people rose to 815 million, or 11 percent of the world’s population, in 2016. The figure represents an increase of 38 million over the previous year.

It remains to be seen if the change is the start of a new trend or a one-off aberration, but the report attributes the increase to man-made conflicts, a sputtering economy and climate change.

Watch video12:02

East Africa – An end to famine by 2030?

World hunger peaked in 2000 when 900 million people didn’t have enough food. Still, the UN warned the latest figure “is cause for great concern.”

Some 20 million people are at risk of famine in parts of South Sudan, Somalia, northeast Nigeria and Yemen where violent conflicts have created much of the food crisis.

But a slowdown in global growth in recent years, which led to a collapse in the prices of numerous commodities, also had a negative impact on the ability of people in many countries to feed themselves, the UN report said.

“Economic slowdowns in countries highly dependent on oil and other primary commodity export revenues have also had an impact on food availability and/or reduced people’s ability to access food,” said the report.

Children in South Sudan await a humanitarian aid distribution in 2015.Children in South Sudan await a humanitarian aid distribution in 2015

Global warming and hunger

The report also points to a link between climate change and conflict.

It “singles out conflict — increasingly compounded by climate change — as one of the key drivers behind the resurgence of hunger and many forms of malnutrition,” said a joint statement by the UN agencies which drafted the report.

Watch video01:01

Warnings of full-blown famine in Somalia

“The concurrence of conflict and climate-related natural disasters is likely to increase with climate change, as climate change not only magnifies problems of food insecurity and nutrition but can also contribute to a further downward spiral into conflict, protracted crisis and continued fragility,” said the report.

It attributed severe weather, “in part linked to climate change” to the reduced availability of food in many countries

Scientists are hesitant to attribute any one weather event to climate change but there is near unanimity that rising temperatures increase the severity of storms and droughts.


bik/sms (AP, AFP, Reuters, dpa)



Courtesy, DW

France: ‘Unemployment is our biggest economic problem’

France’s President Emmanuel Macron has unveiled his new cabinet. It inherits a difficult legacy, in particular a sluggish economy dogged by years of high unemployment. DW’s Doris Pundy reports from Paris.

Paris Wochenblatt Marianne Macron Cover (DW/D. Pundy)“The hardest part is yet to come” reads this French weekly’s headline

It is a quiet scene on Tuesday near the monument commemorating the French Revolution on Paris’s Square of the Republic. Traditionally, the statue is the starting point for protests taking place in the French capital. All traces of the most recent large demonstration on May 1 have disappeared. In a tiny alley less than 300 meters from here is the office shared by Claire Pauchet and Bernard Aznar. They’re fighting for the rights of the unemployed and those who only have unstable work. They know the Square of the Republic very well. Both were there when rallies against former president Francois Hollande’s labor market reforms went on for weeks.

Hollande’s poor results

“Even if we try to be objective – we can certainly not say that Hollande made a strong commitment the rights of the weak,” says Aznar, leader of the National Movement of Unemployed and Precarious Workers (MNCP).

The walls of the small office are plastered with photos taken during demonstrations. Hollande, he adds, was a very business-friendly president, with his former deputy secretary general, Emmanuel Macron, leaving his mark in this respect. The activists fear that there will be more business-friendly reforms in the future, and they want the new government to take the concerns of out-of-work people seriously and offer them alternatives..

Paris Politikaktivisten Bernard Aznar Claire Pauchet (DW/D. Pundy)Aznar and Pauchet fight for the rights of the unemployed

“Macron wants to facilitate business creation, but you have to bear in mind what he really means,” says Claire Pauchet. “That means that everyone is to become self-employed, like those young people riding on bicycles who deliver food to people’s doors. All of them are not employed, they don’t have social security, they have nothing!”

“Unemployment is our biggest economic problem, along with the trade deficit and the high public debt,” explains Paris-based economist Philippe Crevel. “In France, it is higher than the European average. We are as badly affected by it as Italy, Spain, or Greece.”

Almost 10 percent of all French adults don’t have a job. For those who are under 25, that figure rises to almost 25 percent.

Loss of time

“For the last 15 years, there have been attempts at improving the labor market situation. However, one president follows in the footsteps of another, ” says Crevel, adding nothing ever changed. Labor costs continued to be too high, working hours too inflexible, and France’s workers were not sufficiently qualified to cope shift to the digital age.

“Emmanuel Macron faces enormous responsibilities. Now, action must really be taken,” Crevel says. In order to reduce France’s unemployment sustainably, the economist has proposed a series of reforms: lower social security contributions, better education, more investment and more expertise.

Paris Vincent Godebout SNC (DW/D. Pundy)Volunteer Patrick Vignaux (r), pictured here with SNC president Vincent Godebout

Crevel believes that Macron’s chances are good: “He is young, energetic and does not belong to any of France’s traditional political parties.” Macron and his new party “La Republique en Marche” will be competing in parliamentary elections in June. “The party is facing a huge challenge,” says Crevel. “It currently does not have a single seat, but it needs an an absolute majority.”

“Macron’s five-year spell as president won’t be sufficient to change everything for the better in France,” says Patrick Vignaux. “However, the fact that we will now finally have some movement is what counts.”

For more than 10 years, Vignaux has been volunteering to help the unemployed. Initially, he worked with the “New Solidarity in the Face of Unemployment” (SNC) association for only a few hours per week. A few months ago, he asked his employer to allow him a year off to be able to commit himself full-time.

Opposition to reforms

“Francois Hollande did try to improve the labor market situation,” says Vignaux, “but he wasn’t successful.” During Hollande’s tenure, unemployment was reduced by a mere 0.1 percent. At one point, it even reached a record high of nearly 11 percent. “We need extensive economic reforms,” says Vignaux, who also calls for better job training.

Frankreich Protest gegen Arbeitsreformgesetz in Paris (picture-alliance/dpa/I. Langsdon)Paris’s Place de la Republique was the meeting point for those who protested Hollande’s economic reforms in 2016

In 2016, thousands protested in Paris and other French cities against the labor market reforms planned by Hollande’s government. The former president intended to revise labor agreements and loosen overtime regulations, in addition to reducing employment protection. After months of demonstrations and strikes, Hollande passed the labor market law by presidential decree, in order to bypass a vote in parliament.

“The labor unions are already bracing themselves for the follow-up battle,” says the economist Crevel. “I’m convinced we’ll hear a lot from them during the next couple of months.”

Emmanuel Macron has said he will attempt to pass initial economic reforms as early as this summer, also by presidential decree. And indeed, this doesn’t go down well with the activists: “If it turns out to be necessary during Macron’s tenure, we will take to the streets again,” says Claire Pauchet.


Can Trump contain China with Russia’s help?

By nominating China critics and Russia friends, US President-elect Donald Trump has made clear that he intends to change the fundamental rules of US foreign and trade policies, expert Thomas Jäger tells DW.

Symbolbild US-Wahl - Donald Trump & Wladimir Putin (picture-alliance/dpa/S. Thew & A. Druzhinin/Ria Novosti/Kremlin Pool)

DW: By picking hawkish China critic Peter Navarro to lead the newly established White House National Trade Council, what is Donald Trump trying to achieve?

Thomas Jäger: Navarro’s nomination proves that Trump wants to reshape and redesign policies rather than adapting to the changing situations. The incoming US administration says it wants to take a new path in foreign policy. The president-elect’s team won’t be as cautious in its business with China as the Obama administration. Trump believes that the US governments have emboldened Beijing, which now dominates international trade policies.

Will Trump start a trade war with China?

What we can say for sure is the US won’t remain passive anymore. The US under Trump will redefine its relationship with Russia and try to contain China with Moscow’s help. Trump will also strengthen ties with China’s neighboring countries in the Pacific. This would be an enormous economic and political containment of China.

Prof. Thomas Jäger Internationale Politik Universität Köln (privat)Thomas Jäger: If Trump succeeds in reshaping US relations with Russia, China will come under pressure

Are you saying that rapprochement with Russia and aggression toward China is part of the same US foreign policy?

I think so. If Trump succeeds in reshaping US relations with Russia, China will come under pressure. Then Beijing is likely to negotiate and could give up its claims on the South China Sea or offer trade concessions. We should keep in mind that an aggressive economic policy played a big role in the US’ “victory” over the Soviet Union.

Are we in for a complete paradigm shift?

It looks possible. Maybe, it won’t come to this. It also depends on how Moscow and Beijing react to Trump’s policies. But it is pretty obvious that Trump and his team are pursuing a policy of being tough with China and easy with Russia at this point.

Many people still underestimate Trump’s leadership qualities. Is it possible that he actually has a master plan?

Trump is evolving. In the recent weeks, he has consulted many politicians and consulting firms. They certainly have influenced him to some extent. They have introduced him to a world that he didn’t know previously. I think he will be able to use this knowledge and his own ideas to his benefit.

Trump has a completely different way of thinking than President Barack Obama. Obama thoroughly examines issues and then develop a strategy. Trump has a different mindset; he analyzes quarterly reports. I am sure the US foreign and trade policies will also be evaluated on a quarterly basis now.

Thomas Jäger has been teaching international and foreign politics at the University of Cologne since 1999. His main research areas are international relations and the foreign policies of Germany and the United States.

The interview was conducted by Thomas Kohlmann.

Watch video01:08

Death and trade



Final US job report before election shows slight unemployment dip

The United States added 161,000 jobs in October, pushing unemployment below 5 percent. This was the final major report on the American economy before Tuesday’s presidential election.

Logo - Federal Reserve System (Getty Images/AFP/S. Smialowski)

The US unemployment rate fell to 4.9 percent in October, Labor Department figures reported on Friday, as 161,000 jobs were added in the month before Tuesday’s presidential election.

The professional and business sectors, a category that produces mostly higher-paying jobs in engineering and accounting, led the way with 43,000 new jobs in October and 542,000 over the calendar year. Healthcare firms came second with 39,100 added jobs in October.

Average hourly pay rose by 10 cents per hour to a mean of $25.92 (23.32 euros) per hour. That is 2.8 percent higher than one year ago and the strongest 12-month rise in seven years in the world’s largest economy. Consumer prices rose 1.5 percent for the previous 12 months to September, implying that wage boosts were outstripping inflation, at least overall.

The Federal Reserve called the job gains “solid,” despite the unemployment rate changing very little since August 2015, when overall unemployment stood at 5.1 percent.

Effect on the election 

Republican nominee Donald Trump has portrayed the American economy being in a sharp decline and called the Labor Department report released Friday “disastrous,” saying United States President Barack Obama presided over a workforce decline. Trump’s National Policy Director Stephen Miller said “nearly half a million people left the workforce last month, a painful and massive decline.”

Trump’s complaints center around those people of working age in the US not currently looking for work – who are no included in the unemployment figures. These include students, stay-at-home parents, retirees and others. The labor force participation rate, the proportion of people either working or seeking work, dropped slightly to 62.8 percent.

Democratic nominee Hillary Clinton did not immediately respond to the job report. The White House, however, hailed “the longest streak of total job growth on record,” before adding that much work still needed to be done.

Both Clinton and Trump are set to campaign in battleground states Ohio and New Hampshire Friday, where unemployment is below the national average.

kbd/msh (AFP, AP, dpa)


Life between hope and despair in Greece

Greeks refuse to resign themselves to the crisis. The despised ENFIA property tax isn’t helping matters. People are constantly reminding the government of its election promises. Now, Athens has promised swift reforms.

Griechenland Athen Proteste gegen Tsipras

Kostas Giannopolous, founder of the charitable organization “Hamogelou Tou Paidiou” (A Child’s Smile) has run out of patience. For 20 years, the software engineer has been helping children in need in Greece. He has constantly struggled against bureaucracy and underfunding. The worries have not lessened since the refugee crisis. In the port of Piraeus alone, sixty volunteer doctors have been working for the organization around the clock.

The state shows barely any gratitude; as a matter of fact, it has even made a demand for a payment of over 53,000 EUR, as non-profit organizations are also obligated to pay ENFIA, the property tax that was implemented in the crisis-ridden nation in 2012. Left-wing Prime Minister Tsipras clearly promised that he would abolish the loathed tax. Yet the tax is still being charged and it is suffocating the organization that is funded almost exclusively by donations. This is not an isolated case – even SOS Children’s Villages are complaining about their 92,000-euro ENFIA tax bill.

Kostas Giannopoulos High taxes prevent us from helping more children, says Kostas Giannopoulos

“The high taxation prevents us from helping even more children,” warns Giannopoulos in an interview with DW. He cites another example: In Greece’s second largest city, Thessaloniki, a well-to-do citizen allowed “A Child’s Smile” to temporarily use a multistory building free of charge so that at least 50 children could receive care. However, the donor took back his offer after he had received an ENFIA bill of over 50,000 EUR. He could not afford to pay such a large bill without rental income. Giannopoulos explains that the government had originally promised to re-evaluate the ENFIA tax for non-profit organizations in order to avoid harsh taxation, but it seems like nothing has come of that.

Tsipras greeted by protesters

The pensioner and former policeman Christos Fotopoulos is even angrier at the government. Law enforcers are among the main victims of the crisis – the 59-year-old knows this from experience. “After 40 years of service, I retired in 2015. If there were no crisis, I would be receiving a pension of 2,000 euros today,” declares the man from the northern Greek city of Katerini.

Instead, after several rounds of cuts, he now receives 1,295 euros and in October, new cuts are expected. Then, the father of a family will receive just a little over 1,000 euros a month. What annoys Fotopoulos the most is, he says, “This government vainly promised us that there would be no more cuts. Even the previous government could not keep its promise to reverse the former cutbacks. As a result, politicians are losing their credibility; it would have been better if they’d told us the truth from the beginning.”

When he was active in the police force, Fotopoulos was involved in the police union and temporarily acted as head of the union. He does not want to give up hope that his colleagues will be heard by the government. On the weekend, uniformed officers will hold protests in Thessaloniki where Prime Minister Tsipras is expected at the opening of the international trade fair. Police and military officers want to remind the Greek leader of his unfulfilled election promises. Pensioners’ associations also intend to gather in Thessaloniki for a demonstration.

Griechenland Athen Parlament Alexis TsiprasPrime Minister Tsipras is under intense pressure to implement reforms that will hurt a lot of people

Nonetheless, Tsipras is dwelling on the bright side of things – especially with regard to creditors. On September 6, government insiders revealed that they were confident Athens would pay the partial installment of 2.8 billion euros on schedule this fall. Just before the summer break, the finance ministers of the eurozone approved a 10.3 billion euro package for Greece. It is the first tranche of a new aid program worth a total of 86 billion euros.

For the time being, however, the money lenders are willing to disburse only 7.5 billion euros of the approved tranche. The remaining 2.8 billion will follow in September after the Greek government has implemented 15 of the required reforms. Until now, only two of them have been fulfilled. The newspaper “Kathimerini” says the government is lagging behind, but the state broadcaster “ERT” claims that Tsipras has “clearly given orders for the implementation of all 15 terms.”

More and more debt defaults

Meanwhile, the amount of outstanding debt to the state has reached a sad new climax. Figures released on Monday show that tax authorities have registered 90 billion euros of unpaid debts. If the slump in government revenues continues, Prime Minister Tsipras will have to make some painful budget adjustments that Greece has promised its creditors. A lot depends on whether the ENFIA property tax can generate the desired additional revenue of 3 billion euros. What else can Greece do? Kostas Giannopoulos asks the same question. “A few years ago, before the recent change of government in Athens, we once refused to pay the ENFIA tax; subsequently, our bank account was seized. Of course, that is also not an option for us,” says the head of “A Child’s Smile.”


This key recession signal is broken

Monday, 16 May 2016 | 4:45 PM ET

COMMENTSJoin the Discussion

Treasury yields are behaving as if they are signaling a recession, but strategists say this time it’s more likely a sign of something else.

The market has been buzzing about the flattening yield curve, or the fact that yields on longer duration Treasurys are getting closer to yields on shorter duration securities.

In the case of 10-year notes and two-year notes, that spread was the flattest Friday than it has been on a closing basis since late 2007. The yield curve had turned negative in 2006 and stayed there for months in 2007 before turning higher ahead of the Great Recession. The spread was at 95 at Friday’s curve but widened Monday to more than 96.

The impact of central bank easing and concerns about international developments, like the slowdown in China, may be what is really behind the move.

“Historically, a flattening curve pointed to a recessionary environment. However, historically the Fed was not running such a large balance sheet, rates were not effectively zero and we were not faced with a Fed attempting to remove accommodation into a sideways grinding economy rather than an actually strong outright growth profile,” said Ian Lyngen, senior Treasury strategist at CRT Capital. “It’s not clear to anyone that it’s more than a strange residual to the fact that rates are so low and there was QE. … But it does historically suggest a slowing of the broader economy.”

Both the European Central Bank and Bank of Japan instituted negative yields and other easing programs. The Japanese 10-year yield was a negative 0.109 percent Monday while the 10-year German bund was near a historic low at 0.141 percent. That makes the U.S. 10-year’s 1.75 percent yield relatively more attractive.

QE or quantitative easing is the program under which the Fed bought Treasurys and mortgage securities. Other central banks have similar programs.

RBS strategist John Briggs said the curve flattening is the result of stronger demand for long end, not a sell-off at the short end.

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“Usually a curve flattening when the Fed is raising rates means the front end is going up in yield. This is the long end going down in yields,” said Briggs, head of strategy at RBS. The two-year was higher Monday at 0.78 percent.

“If the Fed is on hold and purposely generating an inflation overshoot, usually that leads to a curve steepener. I think it is interesting that the curve is flattening with the Fed on hold,” he said. “I think what we’re seeing there is the overall need for yield in a world bereft of yield.”

Jim Caron, fixed income portfolio manager at Morgan Stanley Investment Management, said the fact that the curve is the flattest it’s been since before the financial crisis is not really meaningful.

Read MoreThe Fed may surprise markets in June – strategists

“As long as the market perceives international weakness (see China’s weak data released over the weekend), then back-end yields will stay low and the curve will flatten,” wrote Caron in an email. He said there is a disconnect between what Fed funds futures say about a very low probability of a rate hike in June, at just 6 percent, and the yield curve.

“But you wouldn’t have guessed that by the recent flattening of the curve. Essentially, the yield curve move is giving you little info about the Fed. It’s mainly international,” he wrote. “I assign no significance to the curve being flatter than 2007 as a result.”