The UN-convened Net-Zero Asset Owner Alliance, a group of institutional investors with a total of $9.5 trillion assets under management, said that its members have on average reduced their absolute financed greenhouse gas emissions by more than 6% annually, consistent with 1.5°C-aligned pathways.

The alliance, launched in 2019 at the UN Secretary-General’s Climate Action Summit in New York, today issued a call to action to governments “to respond with urgency on systemic climate risk.”

“Alliance members have consistently demonstrated high climate ambition through their intermediate targets and have shown credible progress on climate implementation,” the group said in a statement.

“The newest data reveals that, consistent with 1.5°C-aligned pathways, Alliance members have on average reduced their absolute financed greenhouse gas emissions by more than 6% annually.”

However, achieving net-zero commitments by 2050 depends on policy and the real economy keeping pace. Policies currently in place put the world on track for a 2.4°C–2.6°C temperature rise by the end of the century, according to the alliance.

“This group of investors, they’re doing their part in achieving the Paris Agreement, and if everyone was doing the same we would actually be making progress,” Remco Fischer, climate lead at the United Nations Environment Programme Finance Initiative (UNEP FI), told Bloomberg in an interview.

The alliance  called on governments to phase out all unabated existing coal-fired electricity generation following 1.5°C pathways and design and implement Paris Agreement-aligned equitable carbon pricing mechanisms.

The investor group also calls for scaling blended finance to facilitate global finance flows to emerging markets and development economies (EDMEs), which are particularly vulnerable to climate change.

The 88 current members of the UN-convened Net-Zero Asset Owner Alliance have committed to transitioning their investment portfolios to net zero greenhouse gas emissions by 2050, in line with their duties to manage material financial and investment risks.

Source: OILPRICE

Source: Barchart

Malaysia’s fiscal deficit target of 3% by 2026 “remains challenging but achievable”, according to Malaysian Rating Corporation Bhd (MARC).

It said the country can improve its fiscal deficit by targeting an economic growth-interest rate differential metric (differential) of at least 0.9 while keeping debt growth below 8% annually.

The rating agency noted that economic growth relative to interest costs as a metric could offer an alternative assessment of fiscal sustainability, compared to conventional fiscal deficit and debt ratios.

“Malaysia is on track to meet the differential target based on current projections, which is encouraging. However, raising economic growth remains essential to improve the differential further and ensure long-term fiscal sustainability,” it said in a statement .

MARC emphasised that conventional debt-led indicators might result in a limited analysis, thus by broadening the scope and innovating the metrics used, a more comprehensive view of Malaysia's fiscal health can be attained. Higher economic growth relative to borrowing costs would lead to passive deleveraging, which would lower the debt-to-gross domestic product (GDP) ratio naturally, the agency explained.

From 2014 to 2023, Malaysia's average growth-interest rate differential was positive at 0.2%.

However, in 2023, the differential turned negative (-0.2%) due to lower-than-expected domestic economic growth. Despite this, Malaysia fared better than many advanced economies (-1.8%), emerging markets (-1.9%), and Asean countries (-0.3%).

MARC also highlighted the importance of considering contingent assets, which are often overlooked in fiscal assessments, as these assets can play a key role in stabilising the economy when needed, thus providing a more balanced fiscal perspective.

Petroliam Nasional Bhd (Petronas), for instance, contributed RM85.7 billion to government revenue in 2023, and plays a dominant role in the domestic economy.  Additionally, liquid assets, such as funds, cash, and cash equivalents, exceeded RM220 billion in 2023, equivalent to 12% of Malaysia’s GDP, more than Malaysia’s fiscal deficit of 5% as at 2023.

It noted that Petronas’ financial strength is vital for supporting Malaysia’s fiscal position, which is further reinforced by the country’s sizeable sovereign wealth fund. As such, Malaysia’s total contingent assets are estimated as sufficient to cover government-guaranteed debt, it said.

Conversely, contingent liabilities could arise from the financial obligations of government-linked corporations, particularly in the financial sector.

“The relationship between sovereign ratings and the banking sector is reflexive. Changes in a country’s credit rating can impact banks’ funding costs and risk assessments, while the health of the banking sector can, in turn, influence the sovereign rating,” MARC said.

The agency also raised concerns over rising pension obligations, which reached RM22.5 billion in 2023 and are expected to increase to RM25 billion by 2024. Despite an estimated pension fund size of RM169.8 billion in 2022, generating RM6 billion in investment income, the fund remains insufficient to cover growing pension payments.

"To address these fiscal pressures, the government has introduced reforms, including enrolling new public sector recruits into the Employees Provident Fund instead of traditional pension schemes.

"Additional measures, such as raising the retirement age and increasing employee contributions, could further improve the fund’s self-sufficiency and ease long-term fiscal pressures," MARC added.

Source: Theedgemarkets

Above: GBP/AUD (top) and AUD/USD.

Source: Poundsterlinglive

In an egregious example of electoral fraud, incumbent Nicolas Maduro claimed victory in Venezuela’s July 28 presidential elections, refusing to concede defeat to opposition candidate Edmundo Gonzalez Urrutia. Despite independent analyses putting Mr. Gonzalez’s share of the vote above 65 percent, the incumbent government has left no question about the nature of its regime, refusing to release vote tallies, imprisoning opposition political organizers and supporters, and censoring social media. As a result, Mr. Maduro appears poised to hang onto power through the help of the state security apparatus, a compliant judiciary and international authoritarian allies like Russia and China. The actions further isolate the Latin American country, likely spurring more economic uncertainty and emigration.

The Maduro administration stacks the deck

The election and its immediate aftermath represented one of the clearest opportunities for a transition to democracy since national protests and an attempted interim government in 2019. After years of political apathy under Mr. Maduro’s authoritarian thumb, opposition leader Maria Corina Machado of the Plataforma Unitaria Democratica (Democratic Unitary Platform, PUD) captured the popular imagination and galvanized voters.

Although the government banned her from holding office, her management of the diverse coalition was instrumental in uniting Venezuelans of all backgrounds behind replacement candidate, Mr. Gonzalez. Ms. Machado toured the country by car and campaigned in front of massive crowds of supporters ahead of the polls, while Mr. Maduro spoke at half-empty rallies. Unlike in past elections, the PUD this time also prepared a defense against an expected lack of electoral transparency, training more than 90,000 election watchers to monitor polling stations in units known as comanditos.

Still, it was clear that the government would not make things easy. In the months preceding the election, state security forces imprisoned opposition political operators and members of civil society and also revoked an invitation for a European Union electoral observation mission. Local authorities stacked the deck in favor of Mr. Maduro, creating a confusing ballot that favored him while reducing the number of ballot boxes in polling stations to slow voting and complicate monitoring. On election day, the PUD denounced the expulsion of comanditos from voting stations. Nevertheless, the opposition’s preparation paid off, as participation far exceeded expectations.

Despite this optimism, with 80 percent of the votes counted in the early hours of July 29, Elvis Amoroso, the head of Venezuela’s National Electoral Council, declared Mr. Maduro the winner of the election with 51.2 percent versus 44.2 percent for Mr. Gonzalez. No proof nor disaggregated data from the polling stations were provided, in a departure from the Council’s procedure in every previous presidential election. This questionable result was then ratified by the Maduro-friendly Supreme Court.

These tallies show that Mr. Maduro won just 30 percent of the vote, compared with 67 percent for Mr. Gonzalez. 

The PUD and several foreign governments almost immediately dismissed the results as fraudulent, and set out to show the world the scale of the Venezuelan government’s electoral manipulation. Opposition activists gathered, scanned and uploaded more than 83 percent of the voting tallies to a publicly available website that displayed the overall results and the outcomes of individual polling stations. These tallies show that Mr. Maduro won just 30 percent of the vote, compared with 67 percent for Mr. Gonzalez. Subsequent independent analyses carried out by election forensics professors and political scientists, as well as the Associated Press, the Washington Post and the Colombian NGO Mision de Observacion Electoral, have verified the opposition’s calculations and the scale of the fraud. An Organization of American States report noted the technical and legal irregularities, while the Carter Center declared that “the electoral authority’s failure to announce disaggregated results by polling station constitutes a serious breach of electoral principles.”

The aftermath of Venezuela’s vote

Protests began spreading across the country almost immediately as Venezuelans took to the streets to peacefully object to the Electoral Council’s claims of a Maduro victory. Unlike anti-government action in prior years, these demonstrations and cacerolazos (pot-and-pan-banging protests) were not restricted to just wealthy areas – they also took place in working-class neighborhoods that had long been bastions of support for the Chavista government. In several places, crowds even toppled statues of the late former president and strongman Hugo Chavez (1999-2013) out of anger.

The government in Caracas, meanwhile, defied international pressure to publish the full results, and moved to crack down on protestors and suppress dissent by deploying the National Guard, the National Intelligence Service (SEBIN) and pro-government paramilitary colectivos. These groups rounded up and arrested hundreds of protesters and went after opposition political figures, even kidnapping PUD politicians Freddy Superlano and Maria Oropeza, pulling the former out of his SUV by armed and hooded figures, and taking the latter from her home by military counterintelligence.

Still more damaging to opposition unity, a Venezuelan judge issued an arrest warrant for the ostensible presidential victor, Mr. Gonzalez, on September 2. The warrant accused him of several crimes, including usurpation of functions, forging public documents, inciting lawbreaking, conspiracy, sabotage and criminal association. Faced with the possibility of life imprisonment, the 75 year-old Gonzalez instead sought exile in Spain later that week, weakening his ability to contest the electoral outcome.

There was also rapid geopolitical fallout. Latin American governments of Argentina, Chile, Costa Rica, the Dominican Republic, Panama, Peru and Uruguay questioned the election results. In response, the Maduro administration expelled their diplomatic staff, showing its refusal to accept criticism and willingness to isolate itself. Conversely, the only countries worldwide to officially recognize Mr. Maduro as the winner were the authoritarian or hybrid regimes in Bolivia, Cuba, Honduras, Nicaragua, China, Guinea-Bissau, Iran, Russia, Serbia and Syria, emphasizing the global divide between democracies and dictatorships.

Overwhelmingly, most international efforts – including those from the left-leaning governments of Brazil, Colombia and Mexico, as well as the United Nations – have focused on pushing Mr. Maduro to publish full electoral results from each polling station. His government, however, has remained unmoved, arguing implausibly that the Electoral Council had been hacked by a foreign actor. Mr. Gonzalez’s exit from the country appears to have quieted the urgency of these foreign government efforts.

Since the election, Mr. Maduro has cracked down even harder on civil society, further intensifying media censorship and relaunching Operacion Tun Tun (Operation Knock Knock), a massive campaign of persecution directed against opponents, social leaders and protesters. As part of this crackdown, the government launched a webpage, a WhatsApp number and an app that allows users to anonymously report neighbors or acquaintances for so-called subversive activity, such as attending protests, posting statements critical of the government on social media, or even criticizing the government verbally.

According to Venezuelan NGO Provea, the government arbitrarily detained more than 2,400 people in the 16 days following the election, including hundreds of children, while the disproportionate use of force and coordination between security forces and paramilitary groups left dozens dead. Provea also recorded at least 50 cases of forced disappearances, in which victims were illegally detained by security forces and paramilitary groups, often without their families having any information about their whereabouts. In Mr. Maduro’s Venezuela, detainees are not granted procedural guarantees: Most are denied access to both lawyers and family visits, and then they are swiftly sentenced in virtual hearings.

The Maduro regime apparently is also detaining foreign nationals. The governments of the U.S., Spain and the Czech Republic said that their citizens were arrested on trumped-up charges and are being held by the regime without access to lawyers, family or contact with their respective governments.

The government has also attacked the media. On August 7, the Venezuelan Press Workers Union said that four members of the press had been charged with terrorism offences since the election and had been denied access to a defense lawyer. Mr. Maduro has also gone after social media, one of the few remaining spaces for consuming news in Venezuela. On August 8, the president ordered a 10-day ban on access to the social media platform X in an attempt to blunt public criticism and hinder opposition coordination.

Where does Venezuela go from here?

The Maduro government sought international legitimacy that comes with winning elections. However, it appears to have severely underestimated support for the opposition and overestimated support for its own candidate. It is clear that Chavismo has lost its popular mandate: the opposition’s vote tallies show that the ruling party’s supporters in the public sector and poor neighborhoods have largely abandoned Mr. Maduro. In this context, he and his allies can only retain power by force, through control of the country’s institutions and with the support of state security forces.

Source: GIS