India to Rollout Momentous Tax Reform, But Many Fear Rocky Transition

India is set to rollout a momentous tax reform at midnight Friday that will transform the country of 1.3 billion people into a single market.

The Goods and Services Tax (GST) will replace an entanglement of more than a dozen confusing levies with a single tax and bring down barriers between states.

But the transition is bringing upheaval. The new tax has sparked strikes, protests and concerns it could disrupt many businesses unprepared for a leap into the digital economy.

In markets across the country, confusion and chaos prevail among millions of small shopkeepers and traders, who have for decades maintained records in dusty ledgers and issued paper receipts to customers. Some are hurriedly investing in computers as new rules require all but the smallest businesses to submit online taxes every month.

Calculator to computer

Suresh Kumar, who runs a family owned store in a bustling neighborhood market in New Delhi, has never operated a computer and does not have an Internet connection in his shop. His customers mostly pay in cash and a calculator on his counter is the only modern gadget he has used since he opened this shop 47 years ago.

“How will I pay the salary of an accountant? I can barely cover the costs of these three men who help me,” Kumar said, pointing out that stores like his run on wafer-thin profit margins to stay in business.

The archaic accounting systems that were the method of operation of thousands of shops and traders also kept them out of the formal economy.

But as GST draws them into the tax net, government revenues are expected to get a huge boost in a country where tax compliance has been very low.

​Growing pains

The government agrees there will be growing pains due to the scale of the task ahead but points to long-term advantages. Over time, the new tax is expected to add about 2 percent to gross domestic output and vastly improve business efficiencies in the world’s fastest growing economy.

Economists say the GST will be a benefit for manufacturers, because it will free up domestic trade by cutting through a gigantic bureaucracy that involved a myriad of tax inspectors and checkpoints at state borders.

At the moment, trucks transporting goods lose an estimated 60 percent of transit time as they wait at state borders. Paying bribes was a fact of life accepted by businesses.

The tax will also make India’s $2 trillion economy more attractive to investors as it makes the economy more transparent.

More time needed

But in recent weeks many businesses have called for a postponement of the July 1 rollout, saying they did not get enough time to prepare.

K.E. Raghunathan, president of the All India Manufacturers Organization, said businesses need more time to adjust.

“The way it is being implemented, it is bound to create lots of chaotic conditions,” he said.

Underlining concerns of millions of small and medium manufacturers, he said, “they neither have the wherewithal to understand the sudden implementation and if they approach chartered accountants or consultants, it costs lots of money.”

A big concern is that the GST being rolled out by India is far more complex than that introduced by other countries where a single rate prevails. There will be four layers of taxation with rates of 5, 12, 18 and 28 percent.

Manufacturers and traders complain the different levels are creating confusion.

More than 50,000 textile traders went on strike this week. Thousands of other traders shut businesses Friday.

Many big and small retailers worried about the switchover have been offering massive discount sales across the country to get rid of their inventories.

Government pushes ahead

But the government has brushed aside concerns about businesses not being prepared for the switchover. 

“If he is still not ready, then I am afraid he does not want to be ready,” said Finance Minister Arun Jaitley recently as he rejected calls for a delay of the rollout.

Businesses say the tax rollout is the second disruption they have faced, coming months after Prime Minister Narendra Modi’s radical move to scrap 86 percent of the country’s currency, which slowed the economy.

As customers pour into his shop to buy stationery and other items, New Delhi shopkeeper Vimal Jain wonders whether he will handle customers or enter transactions in a computer starting Saturday. 

“Now this is another headache,” he said. “We had barely begun to recover from demonetization and now this sword hangs over our head.”

The tax will be ushered in at a grand midnight ceremony in parliament, but even that has become contentious. Calling it a “publicity stunt,” the main opposition Congress Party and several other parties have said they will boycott the special session.

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In the Age of Smart Devices, How to Protect Yourself from Surveillance, Abuse?

As technology has become part of our daily life, it’s increasingly been used to intimidate victims of domestic violence. In Australia, an organization is helping victims discover smart devices abusers might be using to invade their privacy and control them from afar. As Faiza Elmasry has the story. VOA’s Faith Lapidus narrates.

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Experiencing Hurricane-Force Wind

The 2017 Atlantic hurricane season has arrived. The National Oceanic and Atmospheric Administration says there’s a 45 percent chance that this year’s activity will be above normal, with up to four major hurricanes. VOA’s George Putic visited the wind tunnel at the nearby University of Maryland to experience the hurricane-strength wind and check out the latest in the science of predicting the stormy weather.

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US Growth in First Quarter Better Than Expected, Global Outlook Improves

U.S. economic growth in the first quarter of 2017 was better than expected but not by much. The Commerce Department says U.S. GDP, the broadest measure of goods and services produced in the country, grew 1.4 percent from January to March, 0.2 percent faster than the previous estimate. But many analysts believe U.S. growth will improve in the second quarter. And growth prospects for the global economy are the best they’ve been in six years. Mil Arcega has more.

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Preterm Births in US Increase for a Second Year 

New government data show the health of pregnant women and babies in the U.S. is getting worse, and a report by the National Center for Health Statistics shows the number of babies born prematurely has been increasing since 2014.

Preterm American births increased in 2016 and 2015 after seven years of steady declines. Prematurity rose by 2 percent in 2016 and by 1.6 percent the year before.

Stacey Stewart, president of the March of Dimes, a nonprofit U.S. group that works to eliminate prematurity and birth defects, called the increase “an alarming indication that the health of pregnant women and babies in our country is heading in the wrong direction.”

Expand health care

Stewart called on Washington to expand access to quality prenatal care and promote proven ways to help reduce the risk of preterm birth. Noting that the U.S. Senate is considering a health care bill that many Americans believe would reduce health benefits for poor families and change coverage for maternity and newborn care, Stewart said now “is not the time to make it harder for women to get the care they need to have healthy pregnancies and healthy babies.”

In the U.S., about 400,000 babies born each year before the 37th week of pregnancy are considered preterm. No one knows all the causes of prematurity, but researchers have discovered that even late-term “preemies” face developmental challenges that full-term babies do not. Several studies show that health problems related to preterm births persist through adult life, problems such as chronic lung disease, developmental handicaps and vision and hearing losses.

African-American rates

Research also shows that African-American women are 48 percent more likely to bear a child prematurely than all other women. And African-American infants born with birth defects are much more likely to face severe outcomes, compared to other U.S. newborns.

African-American women in general are worse off than low-income white women, Stewart said.

“We want to make sure that all babies have access to opportunities to be delivered at full term,” she told VOA, “that mothers have the opportunity to have healthy pregnancies and deliver their babies full term, and we know we must do a much better job in African-American and Hispanic communities and in other communities of color,” to make sure that solutions are available.

The report from the National Center for Health Statistics, which is part of the government’s Centers for Disease Control and Prevention, shows that preterm rates rose in 17 of the 50 U.S. states, and that none reported a decline.

The incidence of low birth weight, a risk factor for some serious health problems, also rose for a second straight year in 2016. Again, rates of low birth weight babies were higher for African-Americans than for other racial groups.

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Simple Malaria Intervention in African Schools Leads to Big Improvement in Students’ Performance

New research suggests that the ability of children in Africa to perform well in school could be dramatically improved through basic malaria education and treatment. While less fatal among older children, malaria infections often reduce a child’s ability to concentrate, as Henry Ridgwell reports.

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Kenya’s Nomads Work Together to Reduce Conflicts and Poverty

It looked like a hostage swap, only the currency was livestock and the mission was to end decades of deadly clashes.

More than 50 sheep, goats and cows stood in the scorching heat of a desolate no-man’s land in arid northern Kenya, as Maasai and Samburu herders negotiated their handover.

Lipan Kitonga cast a critical eye over his emaciated herd, which 10 gun-toting Samburu had stolen from his home in Isiolo County, 300 kilometres (186 miles) north of Kenya’s capital.

“I was not around at the time,” said Kitonga, a community-based police officer, known as a police reservist, dressed in camouflage fatigues with a G3 rifle in hand. “Otherwise it would have been a different matter,” he said, his voice still tight with anger nine days after the animal theft.

Drought and violence

Nomadic herders in remote northern Kenya, which is awash with illegal arms, frequently raid cattle from each other and fight over scarce pasture and water, especially during droughts.

A wave of violence has hit Isiolo’s neighboring Laikipia region in recent months as armed herders searching for grazing have driven tens of thousands of cattle onto private farms and ranches from denuded communal land.

The livestock exchange was organized by the Northern Rangelands Trust (NRT), a charity set up in 2004 with support from donors and conservationists to reduce conflict and poverty among nomads by helping them better manage their land.

Almost 300,000 people are members of NRT’s 33 conservancies, which are community organizations focused on conservation, owning nearly 6 million acres (2.4 million hectares) of land across Kenya’s north and coast.

Nomads no more

Drought has hit millions this year in northern Kenya, where most people live off their livestock. As Kenya’s population has doubled in 25 years, nomads can no longer freely follow the rains, turning some overgrazed common lands to dust.

“You have got more people, with more livestock, on less and less productive rangeland and it’s a really explosive situation,” said Mike Harrison, chief executive of NRT, funded by the U.S. Agency for International Development (USAID). “The only answer to this is that everybody has to invest in improving their land.”

NRT promotes rotational grazing with a sustainable number of livestock, which allows land to rest, and the reseeding of degraded areas. Zones are set aside for wildlife, people and livestock, with limited access during drought for nomadic animals from other communities.

It also helps develop new businesses — tourism, bead-making and livestock markets — so nomads are less dependent on herding.

Tourism is the real money-spinner.

The most successful conservancies earn about $500,000 a year from visitors paying daily entry fees of $50-$80, Harrison said.

These earnings go into a community fund with 40 percent spent on operations, such as rangers’ salaries, and 60 percent on community projects, such as education and health, NRT says.

Shootouts

One of NRT’s main achievements has been to reduce conflict, cattle rustling and poaching by funding more than 500 rangers, trained by Kenya Wildlife Service, to patrol members’ land.

Many are police reservists, like Kitonga, issued rifles by the government to back up the overstretched police.

In Nasuulu, just north of Isiolo town, the Samburu, Turkana, Somali and Borana — who have traditionally fought each other — have come together to form one conservancy, an NRT member.

“They never used to talk to each other before, but they are now working together,” said Omar Godana, Nasuulu’s chairman.

 

Wildlife protected, too

Elephant poaching has stopped on 35,000 hectare (86,487 acre) Nasuulu since 12 NRT-funded scouts were deployed, he said.

NRT’s mobile security teams work with the police and wildlife service and receive aircraft and tracker-dog backup from a nearby wildlife conservancy, Lewa.

With increased security and strict controls on grazing, shootouts between armed herders and rangers are inevitable.

“It’s a killer squad,” said John Leparsanti, a Samburu herder in Laikipia who sees the crackdown on illegal grazing on NRT conservancies as a threat to his traditional way of life. “When there is a biting drought we cannot graze.”

Herding is key to the identity and culture of Kenya’s nomads, whose young men are initiated as warriors in colorful ceremonies where each kills a cow and drinks its blood. Their role as ‘morans’ is to guard the community and its animals.

Livestock provide nomads with a ready income because they can be sold quickly for cash. Pastoralists often do not have bank accounts and have high illiteracy rates because they roam over vast terrains with their cattle from a young age.

“We are not ready to do business like other tribes because we believe in cows,” said Samburu politician Mathew Lempurkel. “What are we going to replace them with?”

Harrison says less than 1 percent of NRT members’ land is set aside exclusively for wildlife.

Livestock is life

In remote, insecure lands, with poor roads and patchy mobile phone networks, there are no obvious alternative ways of life.

“If we went to say: ‘Look, you’ve all got to cut your livestock numbers in half, we would be laughed out the door,” Harrison said. “It’s a long slow process of rethinking what the incentives might be, trying different options.”

The authority of elders who used to control shared grazing land has been eroded by centralized government rule and modern education, experts say.

As climate change has brought increasingly frequent and prolonged drought and less grass, herders are keeping more goats as they can browse on shrubs and young shoots, unlike cattle.

The goats rip out the grass roots, further degrading the rangeland and reinforcing the vicious downwards cycle.

Some northern counties have formalized traditional land management customs in local bylaws, with the aim of giving power back to elders, in contrast to NRT’s approach of supporting decision-making by conservancy boards of directors.

“When you have the elders managing, there is enhanced ownership and the feeling of exclusion is not there,” said George Wamwere-Njoroge, an expert with the International Livestock Research Institute, which supports such initiatives.

ILRI is also encouraging herders to keep fewer, healthier animals, which fetch a better price at local markets, instead of trucking their cattle for 24 hours to the capital, Nairobi, where cartels control sales, he said.

Status cows

One solution, rarely discussed by politicians, would be to reduce the number of livestock owned by wealthy, urban elites, who keep vast herds on northern lands as a status symbol.

Unlike in the past, when droughts would naturally have reduced livestock numbers, the elites ship in hay and water to keep their animals alive.

“A lot of destitute pastoralists have dropped out and moved to the small trading centers and depend on relief and petty trade,” said Wamwere-Njoroge. “But the elite pastoralist animals keep on going.”

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The Next Silicon Valley? Head to France  

France is known worldwide for its wine, food and culture, but under its new president, the French are aiming to be the new global hub for tech startups.

President Emmanuel Macron has said he wants to build a version of Silicon Valley in France. His administration has launched pro-business initiatives that are loosening government restrictions and encouraging entrepreneurs to launch their startups in the country.

“The tradition has been in Europe and in France to invest in big, traditional companies and not specifically [in] tech startups. So we will dedicate a €10 billion fund to the investment in tech startups in France,” said Mounir Mahjoubi, France’s Secretary of State for Digital Affairs.

Both public and private investments will factor into Macron’s vision of France as a “country of unicorns” — the term popularly used for tech startups valued at $1 billion or more, said Mahjoubi, who recently was in New York City for “La French Touch” conference, where he discussed France’s strategy for attracting the tech world’s best and brightest.

In the French tech world, all eyes are on the privately financed Station F, which is set to open this summer in Paris. Billed as the world’s biggest startup campus, the 34,000-square-meter space already has major tech companies like Microsoft, Facebook and Ubisoft signed on. The companies will develop their products, as well as host and mentor startup founders in incubator programs. One thousand individual startups are expected to set up shop at Station F.

Seeking global appeal

Silicon Valley has attracted tech talent from all over the world. Now France hopes to do the same for those beyond its borders. Initiatives like the “French Tech Ticket” and more recent “French Tech Visa” are designed to bring startup founders, employees and investors to the country through a combination of mentorships, grants and subsidized work spaces. The French Tech Visa fast-tracks a process for participants to obtain a renewable, four-year residence permit.

Not to be left out are the locals in France’s poorer, outer suburbs, the banlieue. The new administration is aiming for social diversity through inclusion initiatives that foster entrepreneurship, said Mahjoubi.

“We decided to create hubs in the private area[s] of France,” said Mahjoubi. “There might be entrepreneurs over there that believe that it’s not for them, because they couldn’t afford to not having a salary for a year of entrepreneurship … we created the condition so they could receive money from the state, to have a salary during these 12 months [to] push their project to the highest level they can.”

Unemployment at 9.5 percent

The encouragement of entrepreneurship is a novel sentiment in a country where traditional attitudes and strict labor laws have long dominated work culture. With a national unemployment rate of 9.5 percent, venturing out on one’s own to start a business can seem too risky.

But with the success of French unicorns like ride-sharing service BlaBlaCar and network provider Sigfox, attitudes appear to be shifting; 68 percent of French people aged 18 to 25 aspire to run their own business one day, according to a 2015 Ernst & Young survey.

“I think the ecosystem, the government, have done a very good job to do some marketing about entrepreneurship and I think it’s very important because when we compare our situation to the U.S., in the U.S. there is a lot of storytelling, everyone is super enthusiast[ic] and it brings a momentum that is super beneficial,” said François Wyss, co-founder of French startup DataBerries.

Funding available

Wyss and his co-founders recently secured $16 million in their first round of funding for his digital marketing startup.

“There is a lot of funding now in France, so it’s great. We have the chance to have world-class engineers, which are far cheaper than in the U.S. So a lot of companies are developing their core product and R&D in France before exporting it overseas,” said Wyss.

“French tech is all about having roots in France and having a vision for the world,” said Mahjoubi. “The French tech startup scene is an international startup scene.”

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Facebook Says Internet Drone Lands Successfully on Second Test

Facebook Inc. said Thursday that it had completed a second test of an unmanned aircraft designed to someday beam internet access to remote parts of the planet, and unlike in the first test, the drone did not crash.

Facebook plans to develop a fleet of drones powered by sunlight that will fly for months at a time, communicating with each other through lasers and extending internet connectivity to the ground below.

The company called the first test, in June 2016, a success after it flew above the Arizona desert for 1 hour, 36 minutes, three times longer than planned. It later said the drone had also crashed moments before landing and had suffered a damaged wing.

The second test occurred on May 22, Martin Luis Gomez, Facebook’s director of aeronautical platforms, said in a blog post. The aircraft flew for 1 hour, 46 minutes before landing near Yuma, Arizona, with only “a few minor, easily repairable dings,” he said.

Facebook engineers had added “spoilers” to the aircraft’s wings to increase drag and reduce lift during the landing approach, Gomez said.

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Firms Worldwide Still Recovering From Massive Cyberattack

Several companies around the world continue to report outages and damage from Tuesday’s massive Petya cyberattack that hit firms in more than 60 countries.

Heritage Valley Health System, a network of medical offices in the U.S. state of Pennsylvania reported Thursday it still could not provide lab or diagnostic testing to patients. The company said some surgeries had to be canceled and and its satellite offices had been closed since Wednesday.

The large Danish shipping company A.P. Moller-Maersk – one of the largest companies hit by the cyberattack – said it had restored operations at some of its terminals, but others remained inoperable.

A.P. Moller-Maersk said it couldn’t be specific about how many sites were affected, but noted some terminals are “operating slower than usual or with limited functionality.”

Similarities to WannaCry

Europol director Rob Wainwright called Tuesday’s hack “another serious ransomware attack.” He said it bore resemblances to the previous ‘WannaCry’ hack, but it also showed indications of a “more sophisticated attack capability intended to exploit a range of vulnerabilities.”

The WannaCry hack sent a wave of crippling ransomware to hospitals across Britain in May, causing the hospitals to divert ambulances and cancel surgeries. The program demanded a ransom to unlock access to files stored on infected machines.

Researchers eventually found a way to thwart the hack, but only after about 300 people had already paid the ransom.

The most recent hack has been largely contained, but now some researchers are questioning the motivation behind the attack. They say it may not have been designed to collect a ransom, but instead to simply destroy data.

“There may be a more nefarious motive behind the attack,” Gavin O’Gorman, an investigator with U.S. antivirus firm Symantec, said in a blog post. “Perhaps this attack was never intended to make money [but] rather to simply disrupt a large number of Ukrainian organizations.”

Russian anti-virus firm Kaspersky Lab similarly noted that the code used in the hacking software wouldn’t have allowed its authors to decrypt the stolen data after a ransom had been paid.

“It appears it was designed as a wiper pretending to be ransomware,” Kapersky researchers Anton Ivanov and Orkhan Mamedov wrote in a blog post. “This is the worst-case news for the victims – even if they pay the ransom they will not get their data back.”

NSA tools

The computer virus used in the attack includes code known as Eternal Blue, a tool developed by the NSA that exploited Microsoft’s Windows operating system, and which was published on the internet in April by a group called Shadowbrokers. Microsoft released a patch in March to protect systems from that vulnerability.

Tim Rawlins, director of the Britain-based cybersecurity consultancy NCC Group, said these attacks continue to happen because people have not been keeping up with effectively patching their computers.

“This is a repeat WannaCry type of outbreak and it really comes down to the fact that people are not focusing on what they should be focusing on, the very simple premise of patching your systems,” Rawlins told VOA.

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