The Weekly Lift - January 20, 2022

This week's selection of articles and headlines*:

Navient To Cancel $1.7 Billion In Student Debt As Part Of Settlement

The Los Angeles Times (US) reports that "Navient, a major student loan servicing company, has settled allegations of deceptive lending practices for $1.85 billion, officials said Thursday in announcing a settlement that would cancel the debt of tens of thousands of borrowers.

The settlement includes $1.7 billion in debt cancellation and $95 million in restitution and involves 39 state attorneys general. It resolves allegations that Navient led student borrowers into long-term forbearances instead of giving them advice on less-costly repayment plans, said Pennsylvania Atty. Gen. Josh Shapiro,?who co-led the litigation and negotiation of the settlement with the states of Washington, Illinois, Massachusetts and California.?

“Navient repeatedly and deliberately put profits ahead of its borrowers — it engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back, and placed an unfair burden on people trying to improve their lives through education,” Shapiro said in a statement.

The settlement will require court approval. Under the terms of the settlement, Navient will cancel more than $1.7 billion in subprime private student loans owed by more than 66,000 borrowers nationwide, Shapiro said. Navient will also pay a total of $142.5 million, of which $95 million will be distributed to approximately 350,000 federal loan borrowers who were placed in certain types of long-term forbearances.?

Shapiro said the subprime loans were made “to borrowers they knew could not pay the money back,” a situation similar to the 2008 mortgage crisis. Additionally, he said, Navient “misled borrowers into forbearances ... and led many to accumulate more debt and never-ending interest payments.”

The settlement requires Navient to explain the benefits of income-driven repayment plans and to offer to estimate income-driven payment amounts before placing borrowers into optional forbearances.

Navient must also train specialists who will advise distressed borrowers concerning alternative repayment options and counsel public service workers concerning Public Service Loan Forgiveness and related programs.?

As a result of the settlement, consumers receiving private loan cancellation will receive a notice from Navient along with refunds of any payments made on the canceled loans after June 30, 2021."

International Relations: Turkey, Armenia To Hold Talks On Normalizing Ties

The Globe and Mail (Canada) writes that "Turkey and Armenia on Friday said a first round of talks in more than ten years was “positive and constructive,” raising the prospect that ties could be restored and borders reopened after decades of animosity.

Turkey has had no diplomatic or commercial ties with its eastern neighbour since the 1990s. The talks in Moscow were the first attempt to restore links since a 2009 peace accord. That deal was never ratified and relations have remained tense.

The Turkish and Armenian foreign ministries said on Friday the talks were held in a “positive and constructive” atmosphere, adding both sides were committed to a full normalization without any preconditions. They said special envoys had “exchanged their preliminary views regarding the normalization process.”?

The neighbours are at odds over several issues, primarily the 1.5 million people Armenia says were killed in 1915.

Armenia says the 1915 killings constitute a genocide, a position supported by the United States and some others. Turkey accepts that many Armenians living in the Ottoman Empire were killed in clashes with Ottoman forces during World War One, but contests the figures and denies killings were systematic or constitute genocide.

In separate but similarly worded statements, the foreign ministries said a date and location for the next round of talks would be finalized later. Turkish diplomatic sources said the discussions between the delegations lasted for about 1.5 hours.

Russia’s TASS news agency cited Armenia’s foreign ministry as saying on Thursday it expected the talks to lead to the establishment of diplomatic relations and opening of frontiers closed since 1993.

Turkish Foreign Minister Mevlut Cavusoglu said last year the two countries would also start charter flights between Istanbul and Armenia’s capital Yerevan under the rapprochement, but that Turkey would co-ordinate all steps with Azerbaijan.

Turkey’s President Tayyip Erdogan said on Thursday Armenia needed to form good ties with Azerbaijan for the normalization effort to yield results.

Despite strong backing for normalization from the United States, which hosts a large Armenian diaspora and angered Turkey last year by calling the 1915 killings a genocide, analysts have said the talks would be complicated.

Emre Peker, a London-based director at Eurasia Group, said a cautious approach focusing on quick deliverables was expected on both sides due to the old sensitivities, adding the role of Russia, which brokered the Nagorno-Karabakh ceasefire and is the dominant actor in the region, would be key.

“The bigger challenge will come from the question of historic reconciliation,” Peker said, adding that the fate of talks would depend on “Ankara’s recognition that it must rightsize its ambitions.”

Human Rights: Billionaire’s Star Rises As She Takes Bold Stance On Racism In Brazil

The New York Times (US) reports that "Luiza Trajano turned a small family store into a retail giant. Now, a company policy limiting its executive training program to Black applicants is drawing praise, outrage and much soul-searching.

A few years back, she said, she had heard a young, accomplished Black businesswoman mention that she never attended happy hours with colleagues unless her boss explicitly asked her to join.

Ms. Trajano, who is white, felt a pang of sadness. Then an uncomfortable thought crossed her mind. That moment of introspection for Ms. Trajano, who had turned a small family business into a retail behemoth, helped plant the seeds for a bold corporate affirmative action initiative, which has drawn praise, outrage and plenty of soul searching in Brazil.

For the past two years, the public company, called Magazine Luiza, or Magalu, has limited its executive trainee program for recent college graduates — a pipeline to well-paying, senior roles — to Black applicants.

The announcement, in September 2020, generated a deluge of news coverage and commentary. Much of it was critical. The hashtag #MagaluRacista — which means racist Magalu — trended on Twitter for days. A lawmaker close to Jair Bolsonaro, Brazil’s conservative president, urged federal prosecutors to open an investigation into the company, arguing that the program violated constitutional protections.

But Magazine Luiza called it a necessary and overdue step to diversify its senior ranks and to atone for the brutal legacy of racism in Brazil, where slavery was not abolished until 1888. Ms. Trajano emerged as the most visible and vocal defender of her company’s policy.

Ms. Trajano has made waves far beyond corporate spheres by speaking bluntly about issues like race, inequality, domestic violence and the failings of the political system. Parties across the political spectrum have begged her to run for office — seeing in her a rare blend of pragmatism, charisma and smarts.

Ms. Trajano was born an only child in Franca, a midsize city in the highlands of S?o Paulo state, where an aunt who shares her name opened a small gift store in 1957. She took the helm of the business in 1991 and oversaw a huge nationwide expansion driven by the corporate mantra: “Make available to many what has been a privilege for a few.”

As Magazine Luiza — which sells a bit of everything, including household goods, electronics, clothing and beauty products — grew into a behemoth with 1,400 stores. As retail sales started to shift online, Ms. Trajano invested heavily in creating a digital marketplace and a distribution system as she groomed her son Frederico Trajano to take over day-to-day management of the business in 2016 as chief executive. She remains president of the board and its most visible figure.

Ms. Trajano credited her son with coming up with the Blacks-only trainee program in 2020, but noted that it followed years of her pointing out that trainee classes were overwhelmingly white. The program has drawn neither lawsuits nor any government action.

The company doubled down on the initiative by?releasing a 23-minute documentary about the selection process that feels more reality show than corporate promotion. It features applicants talking about the barriers they faced in getting their careers off the ground and shows some breaking down in tears when they learn they were accepted into the program.

Ms. Trajano has said emphatically that she does not intend to run for office. But she has become increasingly active in shifting political debates through a group for women leaders she founded in 2013 with the aim of advancing gender parity in all spheres of power. Today, the group has more than 101,000 members.

There has been fervent speculation online that Ms. Trajano could be a wild card in this year’s presidential elections, perhaps as a running mate of Mr. da Silva, the front-runner in the race. While she has categorically ruled out playing such a role, it’s clear Mr. Bolsonaro has come to see her as a threat to his re-election prospects.

In November,?he seemed to relish?that the company’s stock price had fallen in recent months amid speculation of a political partnership between Mr. da Silva and Ms. Trajano, whom the president referred to as a “socialist.”

Later that day, when Ms. Trajano was asked about the president’s remark, she said she didn’t find the label offensive. “I think social inequality must be confronted,” she said. “If that’s being a socialist, then I’m a socialist.”

Business: Global Venture Capital Investment More Than Doubled In 2021, Quadrupled In Latin America

The Rio Times (Brazil) reports that "global venture capital investment was US$621 billion during 2021, up 111% from US$294 billion the previous year, and translated into 34,647 deals closed, according to data from business analytics platform CB Insights.

Of the money invested, US$311 billion corresponds to the US, US$176 billion to Asia, and US$93 billion to Europe. In?Latin America, investment was approximately US$20 billion, almost four times the previous year’s figure.

The number of?unicorns?-firms valued at more than US$1 billion- would have increased to 959, an increase of 69% concerning the 2020 measurement. It means that, during 2021, 517 such firms were born, more than two for every business day of the year.

The largest of these continues to be ByteDance, the Chinese company that owns TikTok, with a valuation of US$140 billion, followed by the American SpaceX, founded by Elon Musk, and Stripe, a financial services company, whose values revolve around US$100 billion.

The sector with the most investments continues to be the financial sector. Around US$1 out of every US$5 is invested in fintech. In total, US$131 billion were invested in these companies, which translates into a total of 4,969 closed financings.

Other areas that were protagonists during 2021 were retail tech, which received US$109 billion, and health-related ventures, in which US$57 billion were invested.

In Latin America, CB Insights recorded 952 financings closed. The companies that closed the largest financing rounds are all?Brazilian. The “social commerce” app Facily scored with two of the five most considerable capital raises. It is followed by the logistics company CargoX and the e-commerce platform Olist.

In Central America, FTX, a Bahamas-based?cryptocurrency exchange platform, also stands out, which after a new round of US$421 million would have been valued at US$25 billion.

The funds that invested the most in the region were Kazkek Ventures from Argentina and Monsahees from Brazil, followed by SkyVision Capital, a company headquartered in the Virgin Islands.

Environment: Ecuador Expands Protections Around Galápagos, Creating ‘A New Highway’ For Sea Life

The Washington Post (US) writes that "the Galápagos, Charles Darwin once said, are “a little world within itself.” Many of the finches, tortoises and other animals that he saw there in 1835 — and that inspired his ideas on evolution — know no other home on Earth.

But the sharks, whales, sea turtles and manta rays that teem in the waters around the wildlife-rich islands are on the move. Like Darwin, who spent only five weeks in the Galápagos, many sea species there are transient, regularly migrating outside that little world and to neighboring island chains.

On Friday, the government of Ecuador announced it will curb fishing in more than 20,000 square miles of ocean to the northeast of the archipelago, in essence erecting guardrails around an underwater animal freeway between the Ecuador’s Galápagos Islands and Costa Rica’s Cocos Island.

“It’s like creating a new highway for them to travel,” said Gustavo Manrique, Ecuador’s minister of environment, water and ecological transition. No fishing will be allowed in half of the newly protected area, while longline fishing will be banned in the other half.

Since 1998, more than 50,000 square miles surrounding the Galápagos has been set aside as a marine reserve, protected from industrial fishing. But schools of bulbous whale sharks and trim scalloped hammerheads zip between archipelagoes in search of food or mates, putting themselves at risk of being?hauled up with fishers eager to sell their fins in Asia, where many regard shark fin soup as a delicacy.

The decree Friday from Ecuadoran President Guillermo Lasso?comes?as calls to safeguard more of the world’s oceans grow louder. The burdens on ocean life — from littered plastic, increased temperatures and more-acidic waters in addition to overfishing — are conspiring to make the oceans inhospitable for many forms of marine life upon which millions of people depend.

Ecuador is?cooperating with Colombia, Costa Rica and Panama to link their marine reserves and protect a span of the Pacific coast. In recent years, Chile, New Zealand, the United States and other nations have expanded their own protections for marine life.

Those efforts are underway as the world’s nations?set out to conserve a tenth of the world’s coastal and marine areas as part of a global agreement called the Convention on Biological Diversity. Many scientists and politicians are urging nations to up that percentage.

Among wildlife havens, the Galápagos, as always, stand apart. The fertile waters around the islands some 600 miles off the South American coast?teem with more sharks than anywhere else in the world and make Ecuador one of the world’s top tuna producers.

Yet legal protections there alone only go so far. By?one estimate, about a half-million sharks were killed annually in the waters off Ecuador between 1979 to 2004, their bodies often dumped overboard after the fins were harvested. The taking of sharks around the once unspoiled island chain threatens not only the apex predator but each fish down the food chain.

Manrique, the government’s environmental minister, conceded there is illegal fishing in existing protected areas.In the coming days, Manrique said, the government will announce steps to better fund conservation efforts — a tall order for a developing country facing an outsize impact from climate change.

It’s ironic, he said: Less than 1 percent of the world’s carbon dioxide emissions come from Ecuador. “It’s really interesting, that contrast.”

*please note that certain articles may have been modified or summarized to fit the format of the newsletter.

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