Trump or Biden’s big economic challenge: millions of struggling Americans

By Jonnelle Marte

(Reuters) – The winner of the race for the White House will face a generation of low-to-middle income Americans struggling to get back to work because of a health crisis not seen in more than 100 years.

Whether it’s President Donald Trump or Democratic challenger and former Vice President Joe Biden, the reality is grim: about half of the 22 million who lost their jobs during the pandemic are still out of work.

New hiring is slowing, dimming prospects for the low-wage workers hit hardest by job losses. Infections of the virus that killed more than 225,000 Americans are rising to new records. Hotels, transportation companies and food providers warn that more layoffs are coming, and the government aid that helped many pay the bills is long gone.

Securing a future for a vast, growing underclass “is the most important challenge America faces over the next few years, 10 years, 20 years,” said Gene Ludwig, a former comptroller of the currency under President Bill Clinton and author of “The Vanishing American Dream,” a book about the economic challenges facing lower and middle income Americans.

“We cannot sustain a democratic society that has these kinds of numbers of low and middle income people that aren’t able to have a hope for the American dream and live decently.”

Congressional Democrats and the Trump administration have been trying to negotiate a $2 trillion coronavirus aid bill, but many Senate Republicans object to the cost and question whether more stimulus is needed. A deal may not be reached until early 2021.

SAVINGS DRY UP

That’s going to be too late for some.

Direct cash payments and enhanced unemployment benefits established by the CARES Act, which added $600 a week to state unemployment benefits, lifted more Americans out of poverty in April even as unemployment soared, according to research by the Center on Poverty & Social Policy at Columbia University.

People receiving the enhanced benefits were able to spend more, build savings and pay off debt, according to an analysis by the JPMorgan Chase Institute.

But after the benefits expired at the end of July, poverty is once again on the rise – with the monthly poverty rate reaching 16.7% in September from 15% in February, according to the Columbia study. After a decade of decline, hunger is rising nationwide.

Lisandra Bonilla, 46, saved roughly a third of the enhanced unemployment benefits she received after she was furloughed in late March from her job at an employment agency in Kissimmee, Florida. “I had saved a lot because I didn’t know what was going to happen,” she said.

It was smart planning: in August her benefits were cut to $275 a week before taxes, the maximum in Florida, down from more than $800.

Bonilla returned to work part-time in late September, but now she is struggling to pay the bills on half her previous pay, and fears her savings will be gone by December.

If she isn’t hired full time soon, she needs to find another job.

“We’re trying to shovel ourselves out of the hole, but at the same time the hole is getting bigger,” said Wendy Edelberg, director of the Hamilton Project and senior fellow at the Brookings Institution.

Two factors are particularly worrying, she said. More than 420,000 small businesses shuttered between March and mid-summer, which is more than three times the typical pace, she estimates. And permanent layoffs are also on the rise, hitting 3.8 million in September from 1.3 million in February – similar to levels seen before the 2008 election.

THE LONGTERM UNEMPLOYMENT TRAP

Bishop Donald Harper has been on more than 50 job interviews since he was furloughed in March.

Harper, 55, a veteran chef, most recently oversaw five restaurants at an Orlando resort. But with occupancy still low, it’s not clear when he’ll get back to work.

Applications for jobs at super markets or in health care have also been fruitless.

“I can do anything and everything,” said Harper, who also serves as a bishop for a nondenominational church. He is struggling to pay for food and utilities on $275-a-week unemployment, and three months behind on his $1,900 a month rent.

“I don’t want to be homeless,” said Harper, who lives with two children ages 10 and 13. He has reached out to more than 20 groups seeking rental assistance, with no luck.

The United States has 2.4 million and growing “long-term” unemployed, officially defined as those who have been out of work for 27 weeks or more. Getting everyone back to work is crucial, but economists say these job seekers are at greater risk of dropping out of the labor market or taking lower paying jobs.

This week, the U.S. Commerce Department is expected to report that Gross Domestic Product surged in the third quarter, thanks in part to fiscal stimulus that kept U.S. workers afloat, but has mostly expired.

Now, people who are out of work or in low-wage jobs need rental support, direct cash payments and food assistance, as well as federal jobs projects and retraining programs, labor economists say.

If elected, Biden has pledged to raise the federal minimum wage, and roll out trillions of dollars in infrastructure and green energy programs. But he’ll need the votes in Congress to do it.

Trump has signaled support for more federal stimulus, but has offered fewer specifics on jobs.

Until help arrives, workers are struggling.

Rachel Alvarez, 44, a single mother of three in Naples, Florida, starts a new job this week as a server at a restaurant – her first time working since she lost her job in March.

Restaurant workers who depend on tips aren’t making much money, because business remains slow due to the coronavirus, she said. She hasn’t paid rent since June, and is still waiting to hear from the county government about a grant.

“I’m going to keep my head up, because if shit like this ever happens to my children I want them to keep their head up too,” said Alvarez.

(Reporting by Jonnelle Marte. Additional reporting by Andy Sullivan and Richard Cowan; Editing by Heather Timmons and Edward Tobin)

U.S. median income hit record high before coronavirus hit, Census says

By Susan Heavey

WASHINGTON (Reuters) – U.S. median household income hit a record high in 2019 and the poverty rate fell, according to a government survey released on Tuesday that offered a snapshot of the economy before millions of American jobs were destroyed by the coronavirus pandemic.

The U.S. Census Bureau said real median household income jumped 6.8% from $64,324 in 2018 to $68,703 last year – the highest since the agency began tracking the data in 1967.

It also said the nation’s poverty rate fell last year to 10.5%, a 1.3-percentage-point drop. Another measure of poverty that adjusts for government aid programs for low-income Americans showed a drop to 11.7% last year from 12.8% in 2018.

At the same time, however, the number of people without health insurance for at least part of the year hit 29.6 million, up one million from the year before. The number of uninsured children also grew.

The report offered a look back at the state of the economy before the novel coronavirus outbreak hit the United States early this year, shuttering many businesses as the country sought to contain the pandemic.

Since then, more than 6.5 million people in the United States have contracted the highly contagious virus and more than 194,000 have died. Vast swaths of the economy were devastated and 22 million Americans were thrown out of work.

While activity is now rebounding, economists warn that the recovery may be uneven as federal stimulus money runs out with no signs of replenishment from Washington. A potential second wave of COVID-19 infections this autumn and winter as people move back indoors also looms large.

President Donald Trump, who had staked his re-election on economic gains before the outbreak, has downplayed impact of the virus and the risk of another wave, as he has urged states to fully re-open. He has also repeatedly touted gains on Wall Street – a narrow gauge of economic performance – and pledged to rebuild the economy if he wins a second term.

His Democratic rival in the Nov. 3 election, former Vice President Joe Biden, has said the gains since COVID-19 emerged have been uneven and have left many segments of the working population still reeling.

“Those at the top see things going up. But those in the middle and below see things getting worse. And we have leaders who bear false witness, want us to believe that our country isn’t gone off track,” Biden said on Monday.

A Reuters/Ispos poll in late August showed American’s support for Trump’s handling of the economy has slipped.

The income and poverty data for 2019, the last year of the economic expansion following the 2007-2009 Great Recession, “do not reflect the impacts of the COVID-19 pandemic or the current recession,” Census’ Social, Economic and Housing Statistics Division chief David Waddington told reporters on a conference call.

Census officials and private economists cautioned that the COVID-19 outbreak impacted data collection as the agency suspended in-person interviews earlier this year.

(Reporting by Susan Heavey and Tim Ahmann; additional reporting by James Oliphant; Editing by Chizu Nomiyama, Jonathan Oatis and Marguerita Choy)

Most people want billionaires to pitch in to aid poverty and inequality

By Ellen Wulfhorst

NEW YORK (Thomson Reuters Foundation) – Eight out of 10 people think billionaires should help end poverty, inequality and a host of global ills, a poll showed on Wednesday, as funding shortages and the new coronavirus stymied hopes of meeting the United Nations’ development goals for 2030.

The ambitious plans, known as the Sustainable Development Goals (SDGs), were agreed unanimously by U.N. member states in 2015 with a list of targets to end hunger, gender inequality, and boost access to education and healthcare by 2030.

But researchers said there was now a shortfall of $400 billion a year to achieve those goals – with a financing gap of $350 billion in the 59 poorest countries alone – which would have global implications.

“Philanthropy can step in and plug huge critical gaps,” said Michael Sheldrick, chief policy officer at Global Citizen, an anti-poverty group, which surveyed almost 27,000 people in 25 countries together with Glocalities, a Dutch research agency.

“The COVID-19 is an example of that,” Sheldrick told the Thomson Reuters Foundation in an interview in New York.

“You’ve seen this upsurge in philanthropy, and our hope is that we can channel this into funding the SDGs more broadly.”

Organisations started by billionaires, such as the Bill & Melinda Gates Foundation and Facebook, have donated millions towards testing, protective gear and other campaigns to fight the COVID-19 pandemic. [nL1N2B24YT][nFWN2BH18Q]

Twitter’s Chief Executive Officer Jack Dorsey earlier this month pledged $1 billion to a charitable fund to help relief efforts related to the coronavirus pandemic, with money later to be directed to girls’ health and education. [nL4N2BV4KS]

Chinese billionaire and Alibaba co-founder Jack Ma pledged through his foundation to donate over 1 million coronavirus testing kits as well as masks, protective suits and ventilators to Africa.

WEALTH TAX OR PHILANTHROPY?

The poll found 82% of people said billionaires should help and contribute to funding the global goals.

On average there was more support for billionaires doing this through philanthropy, with 46% of respondents in favour of voluntary philanthropic donations, but 35% said they should pay a wealth tax to fund the sustainable development goals.

The countries most in favour of billionaires contributing to fund the SDGs were Indonesia, Vietnam and Portugal, while Japan, the Netherlands and the United States came last in the list of 25 countries.

The survey also found that people aged over 55 or aged 18 to 34 were more of the belief that billionaires should pitch in.

People with a higher education level were more in favour of billionaires playing a role, with 85% support, compared to 74% support from those with a lower education.

Experts have warned that the 2030 deadline to meet the U.N.’s development goals is at risk as economies suffer in the fight against the virus, public financing dries up and international cooperation wanes.

Around the world, there are more than 2,000 billionaires worth a combined $10 trillion, said Martijn Lampert, research director of Glocalities.

“People see that billionaires have a moral obligation to contribute,” he said. “This crisis shows the huge inequalities there are, and in the end I think every billionaire has to show his or her true color.”

The $350 billion shortfall, a calculation made prior to the pandemic, breaks down to about $200 per person in the 59 poorest countries, according to Global Citizen.

“We will need to tax high-net worth, especially after the current disaster,” said Jeffrey Sachs, head of the Sustainable Development Solutions Network, a U.N. initiative, who was involved in the study.

“Budgets everywhere are in disarray,” he said in emailed comments. “Inequality plus COVID-19 are leading to a profound social crisis.”

(Reporting by Ellen Wulfhorst, Editing by Katy Migiro and Belinda Goldsmith. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

In farm-rich Argentina, hunger cries ring in leaders’ ears amid crisis

In farm-rich Argentina, hunger cries ring in leaders’ ears amid crisis
By Nicolás Misculin and Miguel Lobianco

CLAYPOLE, Argentina (Reuters) – In the hard-up neighborhood of Claypole on the outskirts of Argentine capital Buenos Aires, Elena Escobar makes her way to the local Caritas Felices soup kitchen to serve food to street children who scrape by from meal to meal.

Escobar, 53, says the volunteer-run kitchen has seen a surge of kids and families seeking help over the last few months, amid a biting recession and fast-rising prices that have pushed millions of people into poverty.

“There are many children in need, many malnourished, with kids that get to dinner time and don’t have any food,” said Escobar. The kitchen receives over 100 children each week, up from around 20-30 when it opened its doors in April.

The rise in hunger and poverty creates a complex backdrop for the leaders of Latin America’s no. 3 economy, who are in knife-edge talks with creditors to avoid default on billions of dollars of debt amid economic and political upheaval.

Ahead of a presidential election on Oct. 27, officials will head to Washington this month to meet with the International Monetary Fund (IMF), a major backer that struck a $57 billion funding deal with the country last year.

Those talks are likely to weigh on the current administration of President Mauricio Macri and the next one, likely led by left-leaning Peronist Alberto Fernandez, the front-runner to win the vote.

The Claypole kitchen is far from alone in witnessing rising hardship, with government data showing poverty rates jumped to 35% in the first half of 2019 amid recession and steep inflation, from 27.3% a year earlier.

‘A SCOURGE’

Around 13% of children and adolescents went hungry in 2018, according to data from the Pontificia Universidad Católica Argentina, and rising food prices have become a regular target of popular anger in street protests around the country.

Political leaders know something must be done, but face a complex juggling act: bolstering growth and spending to ease issues such as hunger, while cutting debt and averting a damaging default that would shut off access to global markets.

“We can’t live in peace with such a scourge,” left-leaning Fernandez said in a speech on Monday in reference to hunger, which he described as Argentina’s “greatest shame.”

Fernandez, who has been buoyed by support for populist running mate Cristina Fernandez de Kirchner, blames Macri and austerity measures agreed with the International Monetary Fund for the rise in poverty and hunger.

Macri’s running mate, Miguel Pichetto, meanwhile, said on Monday the way to eradicate hunger was to generate employment and attract “big global companies” to Argentina.

Both sides have said they would honor the country’s debts with creditors, including the IMF, though neither has laid out a clear plan for how to do so while boosting spending at home.

Most investors expect some sort of losses.

Indeed, Moody’s Investors Service anticipates holders of Argentina dollar bonds will need to write off  10% to 20% of their investments, while Fitch Ratings believes the government will write down local and dollar debt.

‘JUST NO WORK’

Hunger and poverty are not new in Argentina, but have risen abruptly over the past two years amid a series of economic shocks that have rattled the grain-exporting nation, famed for its rich arable land and cattle.

The issues have become a lightning rod for anti-government protests and marches, with the hardships of the poor brought into sharp focus as the government has been locked in talks with creditors about repayments on around $100 billion in debts.

Driving the problem is stubborn inflation, a tumbling peso and a slump in domestic production and consumption, which have hurt spending power, incomes and jobs.

“There is just no work,” said 46-year-old Isabel Britez, a volunteer at the Los Piletones dining room in Buenos Aires, who said that was the main message she heard from people eating at the kitchen, which serves around 2,000 meals a day.

Macri, looking to revive his election hopes, has rolled out plans to bolster jobs, including tax cuts for employers. He also announced a freeze on some food prices earlier this year.

Sergio Chouza, an economist at the University of Avellaneda in Buenos Aires, said food prices have rocketed nearly 60% over the past year, with basics such as dairy up as much as 90%.

“That results in a deterioration of diets and pushes many people below the poverty line,” he said.

MORE NOODLES, LESS MEAT

Poverty is a key reason for Macri’s fall from grace. His economic austerity, part of the $57 billion funding deal agreed with the IMF last year, reined in deficits but hit growth and voters’ wallets.

Macri was defeated heavily in a primary election in August. Since then, he has announced lower taxes for the middle class and higher subsidies for the poor along with food aid. The Senate approved an emergency food law last month.

“Perhaps we underestimated the impact of the economic situation on the elections. (The poverty issue) affected the vote for Mauricio,” Eduardo Amadeo, a Macri ally and member of Argentina’s house of deputies, told Reuters.

“The reforms we launched have stabilized the economy and we have tried to reduce the impact from the devaluation in August on people’s wallets,” Amadeo said.

A spokesman for the Ministry of Health and Social Development listed official measures to deal with the crisis, but declined to comment further on poverty rates.

In the meantime, even as soup kitchens flourish, some volunteers say meals are getting more meager amid tight funding conditions and as food donations dry up.

“Previously, people donated some meat and chicken; now we only get noodles and rice,” said Lorena Nievas, who works at the Abrazando Hogares soup kitchen in the southern Patagonian city of Puerto Madryn.

For many residents, however, there is no choice.

“I have people from the street who come in for their lunch and snacks here. It’s all the food they get,” she said.

(Reporting by Nicolas Misculin and Miguel Lobianco; Editing by Adam Jourdan and Bernadette Baum)

U.S. minority students concentrated in high-poverty schools: study

U.S. minority students concentrated in high-poverty schools: study
By Alex Dobuzinskis

(Reuters) – Segregation in U.S. public education has concentrated black and Hispanic children into high-poverty schools with few resources, leading to an achievement gap between minority and white students, a nationwide study showed on Tuesday.

Stanford University Graduate School of Education professor Sean Reardon and his team crunched hundreds of millions of standardized test scores from every public school in the United States from 2008 to 2016 to reach their conclusions.

The findings reinforced previous studies illustrating that poverty, linked to continuing segregation, is a key mechanism accounting for racial disparities in academic achievement.

“If we want to improve educational opportunities and learning for students, we want to get them out of these schools of high-concentrated poverty,” Reardon said in presenting his findings at Stanford on Tuesday.

“Part of the reason why we have a big achievement gap is that minority students are concentrated in high-poverty schools, and those schools are the schools that seem systematically to provide lower educational opportunities,” he said.

African-American and Hispanic students tend to score lower on standardized tests than white students, and closing that achievement gap has posed a persistent challenge for educators.

The U.S. Supreme Court in its landmark 1954 decision in Brown v. Board of Education ruled that racial segregation was a violation of the equal protection clause of the U.S. Constitution’s 14th Amendment.

In the decades that followed, public education officials wrestled with how to integrate schools in the face of opposition by residents and politicians in many regions.

This history became a point of contention between Democratic presidential candidates during a televised debate in June, when U.S. Senator Kamala Harris criticized former Vice President Joe Biden for his 1970s opposition to court-ordered busing to reduce segregation.

In a working paper released on Monday, Reardon and his team compared different levels of racial disparities between schools in New York City and those in Fulton County, Georgia, to explain how segregation affected student performance.

The school attended by the average black student in New York City over a recent span of eight years had a poverty rate 22 percentage points higher than that of the average white student. There researchers found white students performing 2-1/2 grade levels above black students on average.

By comparison, the average black student attended a school with a poverty rate 52 percentage points higher than the average white student’s school in Fulton County, where an achievement gap of four grade levels separated black and white students.

Gary Orfield, co-director of the Civil Rights Project at the University of California, Los Angeles and not affiliated with the Stanford study, endorsed the methodology Reardon’s team used but said its findings reveal only part of the picture.

“It’s really misleading to talk about whether race or poverty is most important, because a lot of the poverty is caused by race, and that’s something that people need to keep in mind,” Orfield said.

For instance, discrimination against minority parents is a factor in why those families are more likely to struggle with poverty, Orfield said by telephone.

The Stanford research data is publicly available at the website edopportunity.org.

(Reporting by Alex Dobuzinskis in Los Angeles; Editing by Steve Gorman and Darren Schuettler)

Greece moves hundreds of asylum-seekers from crowded island camp

Children from Afghanistan wait to board a catamaran that will transfer them to the mainland, in Mytilene on the island of Lesbos, Greece, September 2, 2019. REUTERS/Alkis Konstantinidis

By Alkis Konstantinidis

LESBOS, Greece (Reuters) – Greece began moving hundreds of asylum-seekers on Monday from a camp on the island of Lesbos that holds around four times the number of people it was built for.

Over 11,000 refugees and migrants, most of whom have fled war or poverty in the Middle East, Asia or Africa, are holed up at Moria in Europe’s biggest migrant camp.

Some 635 people, mostly families, boarded a passenger ship on Monday for facilities in northern Greece, and more were due to leave later in the day.

Moving asylum-seekers from island camps to the mainland is part of government measures announced on Aug. 31 to deal with the rising numbers. All of Greece’s five formal island camps are over capacity.

Moria, which is a disused military base, has been criticized by humanitarian organizations for its squalid living conditions.

It currently holds the highest number of people in three years and violence is not uncommon. An Afghan boy was killed in a fight there last month and women have told aid groups they often feel unsafe.

Greece is Europe’s main gateway for Syrian, Afghan and Iraqi asylum-seekers, and accounts for more than half of the 56,000 migrants who have landed on the Mediterranean’s northern shore this year.

The numbers are small compared to the nearly 1 million people who fled to northern Europe through Greece in 2015, as a deal between the EU and Ankara in March 2016 all but cut off the flow. But they have still piled pressure on Greek facilities.

About 7,000 people landed on Greece’s shores last month, the highest number since the deal was signed. Last Thursday alone, more than a dozen boats arrived with around 600 migrants, prompting the government’s Council for Foreign Affairs and Defense to hold an emergency session.

To curb the influx, Greece also plans to tighten its border controls and speed up deportations of rejected asylum-seekers.

(Writing by Karolina Tagaris; Editing by Kevin Liffey)

Special Report: Why the military still stands by Venezuela’s beleaguered president

FILE PHOTO: Venezuela's President Nicolas Maduro and Defense Minister Vladimir Padrino speak during a meeting with military commanders, in Caracas, Venezuela June 3, 2019. Miraflores Palace/Handout via REUTERS/File Photo

By Brian Ellsworth and Mayela Armas

CARACAS (Reuters) – One of the central mysteries of Venezuela’s slow-motion collapse: Why does the military continue to support Nicolas Maduro, the president who has led the once-prosperous South American country into poverty and chaos?

The answer, according to people familiar with Venezuela’s military structure, starts with Maduro’s late predecessor, Hugo Chavez, the charismatic caudillo who cemented strongman socialist rule in the nation of about 30 million people.

In a series of actions that began in 1999, the former lieutenant colonel and one-time coup leader began taming the military by bloating it, buying it off, politicizing it, intimidating the rank and file, and fragmenting the overall command.

Once he took office in 2013, Maduro handed key segments of the country’s increasingly ravaged economy to the armed forces. Select military officers took control of the distribution of food and key raw materials. A National Guard general and military deputies now manage the all-important national oil company, Petroleos de Venezuela SA, or PDVSA [PDVSA.UL].

The two leaders also embedded intelligence agents, with the help of Cuba’s security services, within barracks, former officers say, instilling paranoia and defusing most dissent before it happens. Intelligence agents have arrested and jailed scores of perceived troublemakers, including several high-profile officers, even for minor infractions.

The overhaul, former military officials say, created a jumbled and partisan chain of command. Top officers, grateful for perks and fearful of retribution, are often more preoccupied with pleasing Socialist Party chiefs than with national defense. Instead of drills and war games, some generals find themselves fielding calls to plant vegetables or clear garbage.

Many lower-ranking soldiers, destitute and desperate like most of Venezuela’s working class, have deserted the military in recent years, joining at least 4 million other fellow emigres seeking a better life elsewhere. But few senior officers have heeded the opposition’s call for rebellion, leaving the armed forces top-heavy, unwieldy and still standing by Maduro.

“The chain of command has been lost,” said Cliver Alcala, a former general who retired in 2013 and now supports the opposition from Colombia. “There is no way to know who is in charge of operations, who is in charge of administration and who is in charge of policy.”

Some commanders, like Defense Minister Vladimir Padrino, a four-star general, are nearly as much a face of the administration as Maduro. Padrino is sanctioned by the United States for ensuring Maduro’s “hold on the military and the government while the Venezuelan people suffer,” according to the U.S. Treasury Department.

Reuters was unable to reach Padrino or other senior officers mentioned in this article. Venezuela’s defense ministry didn’t reply to email or telephone inquiries. The country’s information ministry, responsible for government communications including those of the president, didn’t reply to Reuters either.

Padrino is hardly alone.

Consider the sheer number of officers awarded flag rank in Venezuela.

The country’s roughly 150,000 Army, Navy, Air Force and National Guard troops are a fraction of the more than 1 million who make up the U.S. armed forces. Yet Venezuela, with as many as 2,000 admirals and generals, now boasts as much as twice the top brass as the U.S. military – more than 10 times as many flag officers as existed when Chavez became president.

The estimate is according to calculations by former Venezuelan officers and the U.S. military.

FILE PHOTO: Venezuela's President Nicolas Maduro arrives for a military parade to celebrate the 196th anniversary of the Battle of Carabobo, next to his wife Cilia Flores and Venezuela's Defense Minister Vladimir Padrino Lopez, in Caracas, Venezuela June 24, 2017. Miraflores Palace/Handout via REUTERS/File Photo

FILE PHOTO: Venezuela’s President Nicolas Maduro arrives for a military parade to celebrate the 196th anniversary of the Battle of Carabobo, next to his wife Cilia Flores and Venezuela’s Defense Minister Vladimir Padrino Lopez, in Caracas, Venezuela June 24, 2017. Miraflores Palace/Handout via REUTERS/File Photo

The result, government opponents say, is a bureaucratic and operational mess, even at the very top.

Padrino, for instance, is both a general and defense minister. But he can’t officially mobilize troops without the consent of Remigio Ceballos, an admiral who also reports directly to Maduro and heads the Strategic Operations Command, an agency created by Chavez to oversee deployments.

“You have a general in chief and an admiral in chief,” said Hebert Garcia, a retired general who once served under Maduro but now supports the opposition from Washington. “Which one are you supposed to obey?”

The armed forces could still turn on Maduro, particularly if popular outrage boils over and makes military support for the president untenable. Still, calls by opposition leader Juan Guaido, who in late April unsuccessfully sought to rally the troops against Maduro, thus far remain unheeded.

Guaido in May told reporters his efforts to convert troops are thwarted by the military’s fragmented structure and intimidation within its ranks. “What is preventing the break?” he asked. “The ability to speak openly, directly with each of the sectors. It has to do with the persecution inside the Socialist Party, inside the armed forces.”

To better understand the pressures and policies keeping the troops in Maduro’s camp, Reuters interviewed dozens of current and former officers, soldiers, military scholars and people familiar with Venezuelan security. In their assessment, the military has evolved into a torpid bureaucracy with few leaders capable of engineering the type of mass mutiny that Maduro’s opponents long for.

“REAL POWER”

Venezuela’s “Bolivarian Revolution,” as Chavez dubbed his remaking of the country, itself has roots in military rebellion. Six years before he was elected president in 1998, Chavez led a failed coup against Carlos Andres Perez, a deeply unpopular president who Congress eventually forced from office.

Once in power, Chavez immediately took steps to enlist the military in his vision for a paternalistic, state-led economy that would share abundant oil wealth with long-neglected segments of Venezuela’s population.

With a new constitution in December 1999, Chavez stripped Congress of its oversight of promotion of senior officers. That gave the president ultimate authority to assign flag ranks and empower allied officers.

Because many state and local governments at the time were still controlled by rivals, Chavez also saw the military as a tool that could show his administration hard at work. A new program, “Plan Bolivar 2000,” ordered troops to fill potholes, clean highways, refurbish schools and carry out other public works.

The $114 million effort put sizeable sums at the discretion of commanders, giving officers a taste for a new kind of influence. “What Plan Bolivar 2000 taught officers was that real power doesn’t lie in commanding troops, but rather in controlling money,” said one retired general. The general, who served under Chavez and Maduro, spoke on condition of anonymity.

Soon, some of the funds began to disappear.

Miguel Morffe, a retired major, once worked as a captain in the remote northwestern region of La Guajira. He recalls receiving a request from superiors to provide materials for an unspecified schoolhouse. When Morffe told a lieutenant colonel that he didn’t understand where the supplies would be going, the superior told him: “I need those materials for something else.”

“The school didn’t exist,” Morffe concluded.

Military officials didn’t reply to questions about the alleged incident.

By 2001, a raft of corruption allegations plagued the Plan Bolivar program.

Chavez fired General Victor Cruz, the Army’s commander in charge of the program. Cruz denied wrongdoing and wasn’t charged with any crime at the time. Venezuelan authorities arrested him last year when press reports linked him to funds in an offshore account. A Caracas court in May ordered him to stand trial on charges of illicit enrichment.

Reuters couldn’t reach Cruz for comment or identify his legal counsel.

In 2002, Chavez said he would wind down Plan Bolivar 2000.

Regional elections, he told Chilean sociologist and political activist Marta Harnecker in an interview, had put more allies in mayoral and state offices, where they could now work in unison with the national government. The military, he said, would return to its normal business.

That April, however, a small group of top officers emboldened Chavez to further remake the armed forces. Encouraged by conservative leaders and wealthy elites unhappy with his leftist agenda, the officers staged a coup and briefly arrested Chavez.

But the coup unraveled. Within two days, Chavez was back in power.

He purged the top ranks. More importantly, he reined in several powerful offices, including the Defense Ministry. Henceforth, the ministry would manage military budgets and weapons procurement, but no longer control troops themselves. Chavez created the Strategic Operations Command, the agency that manages deployments.

The move, former officers say, jumbled the chain of command.

He also rethought overall strategy.

Increasingly concerned that Venezuela’s oil wealth and leftist policies would make it a target for invasion, particularly by the United States, Chavez pushed for the military to integrate further with the government and society itself.

“We’re transforming the armed forces for a war of resistance, for the anti-imperialist popular war, for the integral defense of the nation,” he said at a 2004 National Guard ceremony.

Military leaders soon had to pledge their allegiance to Chavez and his Bolivarian project, not just the nation itself. Despite resistance from some commanders, the ruling party slogan, “Fatherland, Socialism or Death,” began echoing through barracks and across parade grounds.

As of 2005, another factor helped Chavez tighten his hold on power. Oil prices, years before fracking would boost global supply, soared along with the notion the planet’s reserves were dwindling. For most of the rest of his time in power, the windfall would enable Chavez to accelerate spending and ensure popular support.

Oil money also helped him strengthen relationships with like-minded countries, especially those seeking to counterbalance the United States. Venezuela purchased billions of dollars in arms and equipment from Russia and China. It secured medical and educational support through doctors, teachers and other advisors arriving from Cuba, the closest ally of all.

Cubans came with military know-how, too.

A “cooperation agreement” forged between Chavez and Fidel Castro years earlier had by now blossomed into an alliance on security matters, according to two former officers. Around 2008, Venezuelan officers say they began noticing Cuban officials working within various parts of the armed forces.

General Antonio Rivero, who the previous five years had managed Venezuela’s civil protection authority, says he returned to military activities that year to find Cuban advisors leading training of soldiers and suggesting operational and administrative changes.

The Cubans, he told Reuters, advised Chavez to rework the ranks, once built around strategic centers, into more of a territorial system, spreading the military’s presence further around the country. Rivero was stunned at one training session on military engineering. A Cuban colonel leading the session told attendees the meeting and its contents should be considered a state secret.

“What’s happening here?” Rivero said he asked himself. “How is a foreign military force going to possess a state secret?”

Rivero left Venezuela for the United States in 2014.

Cuban officials didn’t respond to requests from Reuters for comment.

The island’s influence soon would become apparent in day-to-day operations.

In Cuba, the military is involved in everything from public works to telecommunications to tourism. In Venezuela, too, ruling party officials increasingly began ordering officers to take part in activities that had little to do with military preparedness. Soldiers increasingly became cheap labor for governors and mayors.

In 2010, a former general working in the Andes, a western region on the Colombian border, was overseeing a complex mobilization of 5,000 troops for a month of combat training. The general spoke on condition that he not be named.

Another general, from a nearby command, called and asked him to halt the exercises. The state governor, the other officer told the general, wanted to reroute the troops – to install energy-efficient light bulbs in homes.

When the general refused, Army Commander Euclides Campos issued a formal order to scrap the training. “This would sound shocking to any military professional, but it’s exactly how the Venezuelan armed forces work,” the former general said.

Reuters was unable to reach Campos for comment.

“TRAITORS NEVER!”

Chavez, stricken by cancer, died in 2013. Maduro, his vice president and hand-picked replacement as the Socialist party candidate for president, won the election to succeed him.

The new president continued naming new flag officers and appointed even more military officials to helm agencies. By 2017, active and former military figures had held as many as half of Maduro’s 32 cabinet posts, according to Citizen Control, a Venezuelan non-profit that studies the armed forces.

In 2014, just as a collapse in oil prices torpedoed Venezuela’s economy, Maduro further fragmented the military structure.

Following the advice of the Cubans, former military officers say, Maduro created new command centers nationwide. He appointed senior officers to run new commands in each of the 23 states and Caracas, the capital, as well as eight regional commands above those. His public speeches are now increasingly peppered with terms like ZODI and REDI, acronyms for the new commands.

Near military facilities, new brass abounded.

“Before, seeing a general was like seeing a bishop or an archbishop, he was an important figure,” recalls Morffe, the retired major. “Not long ago, I saw one in an airport. He walked past a group of soldiers and they didn’t even salute.”

Flag officers now oversee some areas that were once slivers of larger commands, in areas so remote that they have few human inhabitants. The largest landmass in the Western Maritime and Insular Command, overseen by an admiral, is a rocky archipelago with little vegetation and no permanent residents.

The officer, Vice Admiral Rodolfo Sanchez, didn’t respond to a Reuters phone call to his office.

The lopsided, partisan structure has led to mission creep, former officers say.

In the Andes command, which oversees three states, six generals once oversaw roughly 13,000 troops, according to officers familiar with the region. Today, at least 20 generals are now managing ranks that have dwindled to as few as 3,000 soldiers, according to officers familiar with the region.

Last August, three of the generals, including the regional commander, met with municipal officials in the state of Tachira, a hotbed of protests against Maduro in recent years. Days earlier, the government had said explosives used in a drone attack on a military parade in Caracas had been smuggled through Tachira from Colombia.

“All of us together can solve this problem,” Major General Manuel Bernal told the assembled officers and a group of onlookers, including a Reuters reporter.

A Venezuelan soldier loads a truck with garbage at a street in San Cristobal, Venezuela, March 27, 2019. Picture taken March 27, 2019. REUTERS/Carlos Eduardo Ramirez

A Venezuelan soldier loads a truck with garbage at a street in San Cristobal, Venezuela, March 27, 2019. Picture taken March 27, 2019. REUTERS/Carlos Eduardo Ramirez

Bernal wasn’t talking about the drones, however. Or even national security, once a major issue in the Andean region, where Colombia’s guerrilla war long posed a threat. Instead, the generals had gathered to talk about trash overflowing at a landfill. They deployed soldiers to clear garbage and put out a fire there.

A communications official for the Andes command didn’t respond to a Reuters request to speak with Bernal about the episode.

Military bosses show few signs of shying away from such directives. In the weeks since Guaido’s failed call to arms, senior officers have reiterated their commitment to Maduro.

“We will continue fulfilling our constitutional duties, fulfilling duties under your command,” Defense Minister Padrino told Maduro alongside troops gathered in Caracas in early May.

“Loyal always!” Padrino shouted.

The troops responded in unison: “Traitors never!”

(Additional reporting by Mircely Guanipa in Paraguana, Anggy Polanco in San Cristobal, Vivian Sequera in Caracas, and Phil Stewart in Washington. Editing by Paulo Prada.)

Starving girl shows impact of Yemen war, economic collapse

The sister of malnourished Fatima Ibrahim Hadi, 12, who weighs just 10 kg, carries her at a clinic in Aslam of the northwestern province of Hajjah, Yemen February 12, 2019. Picture taken February 12, 2019. REUTERS/Eissa Alragehi

HAJJAH, Yemen (Reuters) – Displaced by war, starving and living under a tree, 12-year-old Fatima Qoba weighed just 10kg when she was carried into a Yemeni malnutrition clinic.

“All the fat reserves in her body have been used up, she is left only with bones,” Makiah al-Aslami, a doctor and head of the clinic in northwest Yemen. “She has the most extreme form of malnutrition.”

Qoba’s slide into starvation is typical of what is happening in much of Yemen, where war and economic collapse have driven around 10 million people to the brink of famine, according to the United Nations.

The sister of malnourished Fatima Ibrahim Hadi, 12, who weighs just 10 kg, carries her at a clinic in Aslam of the northwestern province of Hajjah, Yemen February 12, 2019. Picture taken February 12, 2019. REUTERS/Eissa Alragehi

The sister of malnourished Fatima Ibrahim Hadi, 12, who weighs just 10 kg, carries her at a clinic in Aslam of the northwestern province of Hajjah, Yemen February 12, 2019. Picture taken February 12, 2019. REUTERS/Eissa Alragehi

Aslami said she is expecting more and more malnutrition cases to come through her door. This month she is treating more than 40 pregnant women with severe malnutrition.

“So in the coming months I expect I will have 43 underweight children,” she said.

She said that since the end of 2018, 14 deaths from malnutrition had occurred at her clinic alone.

Qoba, her 10 siblings and father were forced from their home near the border with Saudi Arabia and forced to live under a tree, Qoba’s older sister, also called Fatima, told Reuters.

She said they were fleeing bombardment from the Saudi-led coalition, which intervened in Yemen in 2015 to restore the internationally recognized government of Yemeni President Abd-Rabbu Mansour Hadi after the Houthi-movement ousted it from power in the capital Sanaa in 2014.

“We don’t have money to get food. All we have is what our neighbors and relatives give us,” the sister said. Their father, in his 60s, is unemployed. “He sits under the tree and doesn’t move.”  

“If we stayed here and starved no one would know about us. We don’t have a future,” she said.

After trying two other hospitals which could not help, a relative found the money to transport Qoba to the clinic in Houthi-controlled Aslam, one of Yemen’s poorest districts with high malnutrition levels.

Lying on green hospital sheets, Qoba’s skin is papery, her eyes huge and her skeletal frame encased in a loose orange dress. A health worker feeds her a pale mush from a bowl.

Aslami said the girl needed a month of treatment to build up her body and mind.

The United Nations is trying to implement a ceasefire and troop withdrawal from Yemen’s main port of Hodeidah, where most of Yemen’s imports come from. But violence continues to displace people in other parts of the country, and cut access routes for food, fuel and aid.

There is food in Yemen, but severe inflation has eroded people’s ability to buy it, and the non-payment of government worker salaries has left many households without incomes.

“It’s a disaster on the edge of famine … Yemeni society and families are exhausted,” Aslami said. “The only solution is to stop the war.”

(This version of the story has been refiled to remove extraneous word “they” in paragraph six)

(Reporting by Reuters team in Yemen; Writing by Lisa Barrington; Editing by Alison Williams)

Violence, gangs cast pall over life in Honduras

"El Fresa" (L), a Barrio-18 gang member, sits on a sofa next to another Barrio-18 gang member in San Pedro Sula, Honduras, May 27, 2018. REUTERS/Edgard Garrido

By Edgard Garrido

TEGUCIGALPA, Honduras (Reuters) – Ana Luz, sister-in-law of Ronald Blanco, looked on grimly as neighbors of the murdered Honduran man washed away the rills of blood left where his bullet-ridden body had lain outside his house in a troubled barrio on the outskirts of Tegucigalpa in Honduras.

 

The body of Ronald Blanco, 37, who was shot dead outside his house, lies on a police pick-up truck in Japon neighbourhood in Tegucigalpa, Honduras, August 2 2018. REUTERS/Edgard Garrido

The body of Ronald Blanco, 37, who was shot dead outside his house, lies on a police pick-up truck in Japon neighborhood in Tegucigalpa, Honduras, August 2 2018. REUTERS/Edgard Garrido

It was just one of many scenes I witnessed this year while on assignment in Honduras, where thousands of people sought to escape violence and poverty by joining a migrant caravan in hope of making it to safety across the Mexico-U.S. border. The problems in this small Central American country grabbed international attention as U.S. President Donald Trump cracked down on illegal immigration.

Honduras has for years been one of the world’s most murderous countries. Though official data show the homicide rate has fallen sharply, it continues to be a highly challenging environment in which to work.

According to Honduran government figures, the homicide rate reached 86 per 100,000 people in 2011-2012. This year, the rate should end below 40 per 100,000, the security ministry says. This compares to the latest statistics in the United States, where there were 5.3 murders per 100,000 in 2017, according to the FBI’s most recent report on its website.

Danger in Honduras is never far away.

Forensic workers carry the body of a man who was killed in San Pedro Sula, Honduras, June 4, 2018. REUTERS/Edgard Garrido

Forensic workers carry the body of a man who was killed in San Pedro Sula, Honduras, June 4, 2018. REUTERS/Edgard Garrido

During my roughly three months spent in Honduras in 2018, I photographed mothers waiting at the morgue for the bodies of murdered sons and daughters, police keeping watch over corpses left lying on streets after shootouts and families wailing over the coffins of loved ones.

Blanco, 37, lived in the Japon neighborhood, a breeding ground for gang violence, according to local authorities. It was here that I experienced the most tense moment of my time in Honduras, as I moved between police, soldiers, gang members, forensic experts, hearse drivers and pastors.

At Blanco’s funeral, I was stopped by a young man with piercing eyes, one green and one blue. He demanded to know why I was there.

Civilians and former gang members gesture inside a rehabilitation centre in Tegucigalpa, Honduras, July 13, 2018. REUTERS/Edgard Garrido

Civilians and former gang members gesture inside a rehabilitation centre in Tegucigalpa, Honduras, July 13, 2018. REUTERS/Edgard Garrido

I explained that I was a journalist taking photographs of the event. But the youth kept pressing me with questions about what had brought me to Blanco’s funeral. As I continued taking the photos, I felt increasingly uncomfortable.

Finally, the tension eased when one of Blanco’s friends intervened, saying that the grieving family had authorized my presence.

 

(Reporting by Edgard Garrido; Additional reporting by Delphine Schrank; Writing by Daina Beth Solomon and Julia Love; Editing by Diane Craft)

Mexicans regroup after Willa’s ‘end of world’ onslaught

Hurricane Willa brings high waves to Puerto Vallarta, Mexico, October 23, 2018, in this still image taken froma video obtained on social media. Edgar Paredes, Irma Paredes via REUTERS

By David Alire Garcia

ESCUINAPA, Mexico (Reuters) – Residents on Mexico’s Pacific Coast on Wednesday began clearing up the wreckage left by Hurricane Willa, which ripped through towns overnight, tearing off rooftops, downing power lines and splitting trees apart.

Willa hit the northwestern state of Sinaloa late Tuesday as one of the strongest storms to lash the coast in recent years, with winds of up to 120 miles per hour (195 km per hour).

“I thought it was the end of the world,” said Alma Rosa Ramirez, a 45-year-old resident of the town of Escuinapa, as she described how her whole house rattled in the blasting winds.

Now with the sun peeking through and wind nearly at a standstill, Ramirez and scores of other residents took to the streets to pick up debris, while emergency crews poured in to work on reestablishing basic services.

Ramirez arrived at her tiny fruit and vegetable stand in the shadow of a large stone church in Escuinapa’s central square, saying she feared the storm had devastated the farming region that supplies her with the carrots, squash and chiles she sells.

Fallen tree is seen at the park in Escuinapa, near the southern tip of Sinaloa state after Hurricane Willa hit the area, Mexico October 24, 2018. REUTERS/Henry Romero

Fallen tree is seen at the park in Escuinapa, near the southern tip of Sinaloa state after Hurricane Willa hit the area, Mexico October 24, 2018. REUTERS/Henry Romero

“There’s going to be a lot of poverty,” she said.

No deaths have been reported as thousands of people were evacuated from coastal towns and resorts before the storm hit.

“The population took cover in time,” said Luis Felipe Puente, head of the country’s Civil Protection agency, confirming that no deaths had been reported as of early on Wednesday.

On the other side of Escuinapa, 74-year-old retiree Virginia Medina sat in a white plastic chair, a 4-week-old kitten winding between her legs, as she took in the damage.

Willa showed her little mercy: a metal corrugated roof collapsed, water pooled in the kitchen and gnarled branches littered Medina’s front patio and backyard.

“I can’t even walk in my backyard … Here in the neighborhood a lot of walls came tumbling down. Now there is no power, no gas, there’s nothing,” Medina said.

Willa struck the coast about 50 miles (80 km) south of Mazatlan, a major city and tourist resort in Sinaloa, as a Category 3 hurricane on the five-step Saffir-Simpson scale.

The storm had reached rare Category 5 status on Monday, with winds nearing 160 miles per hour (260 kph), as it headed toward the coast.

The storm dissipated by mid-morning as it moved quickly inland over northwest-central Mexico on Wednesday. It was still expected to dump heavy rains across the region.

By then, the storm was about 75 miles (120 km) west of the city of Monterrey, blowing maximum sustained winds of 25 mph, the Miami-based U.S. National Hurricane Center said.

Downpours in Mexico prior to Willa’s arrival have heightened the risk of flooding, and the NHC said the storm could drench some areas in as much as 18 inches (45 cm) of rain.

(Additional reporting by Dave Graham and Brendan O’Brien; writing by Anthony Esposito and Daina Beth Solomon; editing by Robert Birsel, Helen Popper, Frances Kerry and G Crosse)